May 17, 2022


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IBM Q1 2022 earnings

IBM Q1 2022 earnings

IBM CEO, Arvind Krishna

Source: CNBC

IBM Shares rose 3% in extended trading Tuesday after the technology services company released first-quarter results that beat expectations.

Here’s how the company did:

  • gains: $1.40 a share, adjusted for, versus $1.38 a share, as expected by analysts, according to Refinitiv.
  • Revenues: $14.2 billion, versus $13.85 billion analysts had expected, according to Refinitiv.

IBM said in a statment. This is the company’s first full quarter without the Managed Infrastructure Services business that sprouted into an entity called kendrill. Sales to Kyndryl added 5 percentage points to revenue growth for the quarter.

Net income from continuing operations jumped 64% from the previous year to $662 million. Gross net income decreased by 23%.

IBM raised its full-year guidance, calling for revenue growth in constant currency at the high end of its mid-single-digit range, with 3.5 percentage points of growth from Kyndryl. In January, executives told analysts they expect mid-single-digit growth, not including the impact from Kendrill or the currency.

In the first quarter, IBM’s software segment generated $5.77 billion in revenue, which was 12% higher and above the $5.63 billion consensus of analysts polled by StreetAccount.

Consulting revenue rose 13% to $4.83 billion, above the StreetAccount consensus of $4.6 billion.

Infrastructure revenue fell 2% to $3.22 billion, as customers prepare for IBM’s next-generation mainframes later this year.

Also during the quarter, IBM She said Francisco Partners has agreed to buy Watson’s healthcare analytics and data assets in a deal It said It is worth over $1 billion. IBM released Updated historical figures For the high-margin software sector to better reflect its financials without those companies.

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In early March, IBM She said I stopped doing business in Russia after the country invaded Ukraine.

“Russia is a very small part of IBM,” Jim Kavanaugh, the company’s chief financial officer, said in an interview on Tuesday. He said the country accounts for 0.5% of total revenue and 2% of profits. He said the administration had not seen any impacts on business in Western Europe as a result of the departure.

IBM also announced the acquisition of an environmental data analytics software maker invisi and communications consulting company sintaka.

IBM stock has outperformed the S&P 500 this year, down about 3% as of Monday’s close, while the broader index is down 6%. Investors are trading value stocks in 2022, given rising interest rates and the war in Europe.

“The inflationary effects and the increased cost of talent acquisition are real,” Kavanaugh said during the interview. IBM’s consulting business gross profit margin shrank to 24.3% from 27.8% in the same quarter last year, and the company’s gross margin came to 51.7% compared to 53.3% a year earlier.

Correction: This story has been updated to accurately reflect IBM’s predictions for 2022.

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