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IBM beats across the board, posts revenue growth after four quarters of declines

SVP and Director at IBM Research Arvind Krishna speak on stage during the 2016 Wired Business Conference on June 16, 2016 in New York City.

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IBM shares rose 4% in extended trading on Monday after the enterprise technology and services maker reported first-quarter earnings that came in better than analysts had expected.

Here’s how the company did:

  • Earnings: $1.77 per share, adjusted, vs. $1.63 per share as expected by analysts, according to Refinitiv.
  • Revenue: $17.73 billion, vs. $17.35 billion as expected by analysts, according to Refinitiv.

Revenue grew by 0.9% on an annualized basis in the quarter, compared with a 6% decrease in the prior quarter, according to a statement. The company reiterated previous guidance of revenue growth for the full year.

IBM’s Global Technology Services segment, which handles managed services, outsourcing and support, contributed $6.37 billion in revenue. Its revenue was down 1% year over year and more than the FactSet consensus estimate of $6.32 billion. IBM plans to spin off part of the segment as a standalone public company called Kyndryl by the end of the year.

IBM’s Cloud and Cognitive Software division, which includes Red Hat, came up with $5.44 billion in revenue, which was up 4% and above the $5.30 billion FactSet consensus. IBM reported $529 million in capital expenditures in the quarter, down 28%.

Global Business Services, the unit that includes consulting, contributed $4.23 billion in revenue, which was up 2% and higher than the $4.03 billion consensus.

Systems revenue of $1.43 billion, from sales of mainframe computers and other hardware, was up 4% and above the $1.29 billion consensus estimate.

In the quarter IBM announced that it was acquiring 7Summits, a Salesforce consulting firm, from private-equity-firm Sverica Capital Management, and that it was buying Taos, a consulting group that works on cloud migrations. IBM also said it had sold 250 patents to grocery-delivery company Instacart.

Excluding the after-hours move, IBM shares are up around 6% since the start of 2021, while the S&P 500 index has grown nearly 11% over the same period.

This is breaking news. Please check back for updates.

WATCH: Watch CNBC’s full interview with IBM CEO Arvind Krishna and Cleveland Clinic CEO Dr. Tomislav Mihaljevic

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