Jan 24 (Reuters) - IBM on Monday beat Wall Street
estimates for revenue in the fourth quarter, as its focus on the
cloud paid off in Big Blue's first earnings after exiting the
slow-growing managed infrastructure business.
Shares of the IT giant jumped as much as 7% aftermarket
before easing to trade flat, with the company reiterating its
forecast for mid-single-digit revenue growth in 2022, compared
with 3.9% last year.
"This will be the first quarter where you'll see what
today's IBM looks like, and that is a higher revenue growth
company," Chief Financial Officer James Kavanaugh told Reuters
in an interview.
The 110-year-old company has doubled down on the software
and consulting businesses after shedding its former managed
infrastructure unit in November following years of growth and
Revenue at IBM's consulting business rose 13.1%, while cloud
revenue jumped 16% to $6.2 billion in the quarter.
With cloud adoption surging worldwide, the company has
shifted its focus to the so-called "hybrid-cloud," where
enterprises use a combination of their own data centers and
leased computing resources to store and process data.
U.S. revenue rose in the mid-single digits during the
quarter even as the Omicron variant raged across the country,
Kavanaugh said, adding that industries hit hard early by the
pandemic were bouncing back.
IBM's revenue rose 6.5% to $16.7 billion, adjusted for the
separation of the managed infrastructure services business, now
Kyndryl. Analysts on average had expected $15.96 billion,
according to IBES data from Refinitiv.
"IBM hasn't had this kind of result and with the spin-off, a
lot of this sentiment was that it was going to take a few
quarters for this to flush out," Futurum Research analyst Daniel
Excluding items, IBM earned $3.35 per share, beating
estimates of $3.30.
(Reporting by Chavi Mehta in Bengaluru; Editing by Devika