1 month ago
Stock Market

IBM Climbs After Hours; Results and Guidance Top Forecasts

Investing.com - IBM (NYSE:IBM) reported fourth-quarter earnings that beat analysts' expectations on Tuesday and revenue

Investing.com - IBM (NYSE:IBM) reported fourth-quarter earnings that beat analysts' expectations on Tuesday and revenue that topped forecasts, sending shares higher after hours.

The tech giant reported earnings per share of $4.87 on revenue of $21.76 billion. Analysts polled by Investing.com expected EPS of $4.82 on revenue of $21.75 billion. That compared to EPS of $5.18 on revenue of $22.54 billion in the same period a year earlier. The company had reported EPS of $3.42 on revenue of $18.76 billion in the previous quarter.

IBM shares gained 6.8% to $130.97 in after-hours trading following the report. If the gain holds on Wednesday, IBM could add 58 points to the Dow.

Pushing the shares higher was slightly better-than-expected revenue for the quarter. Big Blue also saw higher profit margins for its key Cognitive Solutions, Global Business Services and decent results from the company's cloud-computing business.

Its cloud business generated $19.2 billion in revenue, up 12%. That included $11.3 billion delivered as a service and $7.8 billion for cloud-related hardware, software and services. IBM is wrapping up its $34 billion acquisition of Red Hat Inc (NYSE:RHT). Red Hat is projected to be a big driver of future growth.

IBM's cognitive software business, which houses artificial intelligence platform Watson, analytics and cybersecurity services and is its second biggest, reported sales of $5.46 billion, compared with analysts' expectation of $5.25 billion. IBM's revenue of $4.32 billion from its global businesses services segment also beat estimates of $4.15 billion.

The company expects to earn at least $12.45 a share in 2019 with operating earnings per share of at least $13.90, above forecasts. Free cash flow is projected at $12 billion, about the same as 2017 but slightly lower than expectations.

-- Reuters contributed to this report.