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IBM Corporation showed an increase in revenue for the first time in 6 years

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IBM Corporation showed an increase in revenue for the first time in 6 years
January 19
09:00 2018

One of the world’s top companies – American IBM (International Business Machines Corporation) has issued a press release with financial results for the fourth quarter of the past year.

According to the promulgated document, the company has recorded a loss of $ 1.05 billion ($ 1.14 per share). However, for the first time since 2012, IBM has managed to increase the quarterly revenue. Its value has amounted to 22.54 billion US dollars, which is 480 million US dollars more than the figure expected by the market analysts. Thus, the quarterly revenue growth has amounted to 3.6%.

Unfortunately, such significant financial indicators were eaten up by taxes that the company had to pay due to changes in tax laws in the United States. It became known about the exact amount that IBM had lost because of that. It amounted to 5.5 billion US dollars.

For such great revenues, the IBM corporate leaders should thank the department, which is in charge of “cloud” services. It is this department that has shown an increase in revenue by a third, to a record $ 5.5 billion.

IBM analysts are optimistic about the year of 2018. It is expected that this year the operating profit will be about 13.8 US dollars (per one share of the company). However, analysts fear that the tax reform will continue to affect the company’s profits in the coming year too.

James Cavanaugh, CFO at IBM, explained that the tax rate had changed from 12% to 16%; that was why the tax reform was assessed by the company’s management as an extremely negative factor.

This year IBM is planning to expand cloud services and invest in the departments, which are responsible for cybersecurity and data analysis.

After the issue of the IBM press release, the company’s stock prices fell by a significant figure of 3.4%. Most likely, in the near future the shares of the company can expect to be adjusted.

The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade

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