Weak numbers in the final quarter: both the operating profit and the sales of the computer group IBM have fallen. But the outlook reconciled the investors.
A weak core business and unfavorable exchange rates further burdened IBM at the end of the year. In the final quarter, revenues fell compared to the previous year by 3.5 percent to 21.8 billion US dollars, the computer company said after US market close.
Although the net result increased to two billion dollars. However, a high depreciation due to the US tax reform had deteriorated the balance sheet in the previous year, which distorts the comparison. Operating income fell 8 percent to $ 4.4 billion.
Nevertheless, the numbers exceeded expectations. The stock gained more than five percent after-hours. Growth in some of the newer businesses, such as cloud services, data analytics and artificial intelligence, has boosted market sentiment. In addition, IBM was also ahead of its forecasts for the current year.
But the IT group continues to suffer from the weakness in the classic mainframe business. Another problem is the strong dollar, which reduces international revenues after conversion into domestic currency. The US group makes its revenues mainly abroad. For all of 2019 IBM managed to increase sales to 79.6 billion dollars. The surplus was $ 8.7 billion.
IBM wants to stand out from Amazon, Microsoft and Google
Company boss Ginni Rometty is setting IBM up for faster-growing cloud services, data analytics solutions and cyber security services. The conversion is bumpy, however, and IBM continues to struggle to grow revenues.
IBM is focused on helping businesses bring together different cloud platforms. With this strategy, they want to differentiate themselves from Amazon, Microsoft and Google.
Last year saw the purchase of the software specialist Red Hat for 34 billion dollars. It is the most expensive takeover in the company’s 100-year history, which also unsettled investors. CFO James Kavanaugh assured analysts that the acquisition was „very positive“ for clients.
Sourse: spiegel.de
