IBM’s 3% sales growth may not seem like much, but it’s the biggest it has seen in three years • The Register

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IBM on Monday announced better-than-expected earnings for the second quarter of 2021, pushing up its shares outside of school hours.

Big Blue, visibly unfazed by a weeks-long email disruption that still remains unresolved, achieved sales totaling $ 18.7 billion for the quarter, a three percent increase year over year. This is the company’s strongest revenue growth in three years. Net income, however, fell 3% to $ 1.3 billion for the quarter.

That translates into non-GAAP adjusted earnings of $ 2.33 per share, seven percent more than the $ 2.18 released during the same period in 2020. Analysts on average expected something more like $ 18.3 billion and diluted EPS of $ 2.29.

Image generated by VQGAN + CLIP AI for the phrase “IBM has the strongest revenue growth in three years” that we thought we were just going to throw in this room

“In the second quarter, customer adoption of our hybrid cloud platform contributed to strong performance in Global Business Services and Software and resulted in improved overall revenue growth,” said Arvind Krishna, President – CEO of IBM, in a press release. ” At the same time. , we continued to help our customers integrate our AI-powered technology offerings into their core workflows. “

The business unit results for the quarter are as follows:

  • Cloud and cognitive software: $ 6.1 billion, up 6.1 percent
  • Global Trade Services: $ 4.3 billion, up 11.6%
  • Global Technology Services: $ 6.3 billion, up 0.4%
  • Systems: $ 1.7 billion, down 7.3%
  • Global funding: $ 242 million, down 8.6 percent
  • Other: $ 5 million, compared to $ 50 million in one year

IBM’s Cloud & Cognitive Software group includes Red Hat results, up 20%. Big Blue announced a GAAP gross profit margin of 48.0% and debt reduction of $ 6.4 billion since the end of 2020.

During the company’s investor call, Krishna explained how companies are using IBM technology to redesign their business processes and pursue the digital transformations made possible by hybrid cloud environments.

He cited an IBM AI-based customer service assistant built in weeks for CVS Health to help manage COVID-19 customer inquiries as an example of the type of deals that will generate future revenue.

IBM said it spent $ 1.7 billion on acquisitions during the quarter. The company previously announced plans to acquire business process data mining company myInvenio, application management company Turbonomic and consulting firm Salesforce Waeg.

Meanwhile, the IT titan plans to complete the split of its Global Technology Services unit under the Kyndryl name by the end of the year.

Domestically, IBM has managed to restore its mail servers most of the time, although a few issues have yet to be resolved.

“Users in some clusters may see a slight delay in the delivery of external mail, and we will be working this week to bring the delivery times back to normal levels,” the company said in a recent status update provided by an expert. internal source.

“We will continue to provide daily updates here as we continue our work to monitor and improve the health and stability of the messaging environment and improve the overall experience.”

The company’s statement says IBM continues to work with email service provider HCL to improve the Web Verse email experience. ®


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