IBM’s Q4 earnings

Technology giant International Business Machines (IBM) released its fourth-quarter earnings on January 22 after markets closed. The company surpassed analysts’ adjusted EPS estimates of $4.81 by 1.1%. IBM’s adjusted EPS of $4.87 in the quarter was down ~6% YoY from $5.18 in Q4 2017. For fiscal 2018, the adjusted EPS were $13.81, 0.1% higher than $13.80 in 2017.

On January 22, IBM stock opened on $123.30 and touched the day’s high at $123.80. The stock plunged to its intra-day low of $121.54. However, the stock later consolidated to close on $$122.52, down 1.3% from January 21’s closing price of $123.82. IBM’s fourth-quarter earnings release after the market close on January 22 pushed the stock up 6.6% to $130.6 due to better-than-expected guidance for 2019.

IBM Jumps 6.6% after Hours on Better-than-Expected Q4 Results

IBM’s revenue and segment performance

IBM’s fourth-quarter revenue was $21.76 billion, down 3.5% YoY from $22.54 billion in Q4 2017. The company’s revenue beat analysts’ revenue estimate of $21.71 billion by a narrow margin. The New York-based technology giant’s largest business vertical, Technology Services and Cloud Platforms, reported revenue of $8.9 billion in the quarter, which was slightly lower than analysts’ expectation of $9.0 billion.

Cognitive Solutions, IBM’s second-largest business segment, posted revenue of $5.5 billion in the quarter. The company’s Global Business Services vertical reported revenue of $4.3 billion in the fourth quarter. Both segments’ revenues were up YoY in Q4 2018. IBM’s Global Financing division posted $402.0 million in revenue, down 11% YoY. IBM expects to complete its $34.0 billion Red Hat acquisition in the second half of 2019.

Peer group’s Q4 earnings

IBM peer (IYW) Microsoft (MSFT) is expected to release its fourth-quarter earnings on January 30. Amazon (AMZN) is slated to report its fourth-quarter earnings on January 31. Intel (INTC) is expected to release its fourth-quarter earnings on January 24.

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