IBM’s revenue slides 6% in the fiscal fourth quarter

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Jan 21, 2021
  • IBM’s revenue slides 6% in the fiscal fourth quarter.
  • The U.S. firm lost 7% in the stock market last year.
  • IBM tops estimates for per-share earnings in Q4.

International Business Machines Corp. (NYSE: IBM) said on Thursday that its per-share earnings in the fiscal fourth quarter were better than expected. Revenue, it added, missed experts’ forecast in Q4. The technology and consulting company’s quarterly update comes a month after it said it will acquire Nordcloud (cloud consulting services provider) for an undisclosed amount.

IBM shares slid close to 7% in extended trading on Thursday. The NYSE-listed company performed slightly downbeat in the stock market last year with an annual decline of roughly 7%. At the time of writing, IBM is valued at £85.41 billion and has a price to earnings ratio of 14.91.

IBM’s Q4 financial results versus analysts’ estimates

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According to Refinitiv, analysts had anticipated the company to print £15.05 billion of revenue in the fourth quarter. Their estimate for per-share earnings was capped at £1.30. In its report on Thursday, IBM recorded a lower £14.83 billion of revenue for the recent quarter, but a higher £1.51 of adjusted earnings per share.

The American multinational’s revenue was 6% lower than the same quarter last year. IBM said that it generated £4.98 billion of revenue from Cloud and Cognitive Software unit in Q4 that represents a 5% annualised decline. As per FactSet, analysts had anticipated a higher £5.23 billion of revenue from this segment instead.

In separate news from the United States, peer Intel also reported its financial results for the fiscal fourth quarter on Thursday that topped analysts’ estimates for earnings and revenue.

Other prominent figures in IBM’s earnings report

Revenue from IBM’s Global Technology Services stood at £4.78 billion (6% lower than last year) in the recent quarter versus a much higher £5.04 billion expected. Global Business Services revenue registered at £3.04 billion in the fourth quarter or 3% lower than the year-ago figure. FactSet Consensus for revenue from this segment was capped at a slightly lower £2.97 billion.

Other prominent figures in IBM’s earnings report on Thursday include £1.82 billion of systems revenue that translates to an 18% decline on a year over year basis. In comparison, experts had called for a lower £1.65 billion of systems of revenue in Q4.

The Armonk-headquartered company refrained from giving its guidance for fiscal 2021 on Thursday but expressed confidence that its revenue was likely to grow this year. IBM expects up to £8.74 billion of free cash flow in 2021.

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