The computer manufacturer was able to please investors with the figures for the fourth quarter.
(Photo: Reuters)
san francisco After the largest corporate restructuring in IBM’s 110-year history, the IT and consulting group presented surprisingly positive figures on Monday. As the company announced, sales in the last quarter of the past fiscal year rose by 6.5 percent to 16.7 billion US dollars. Because analysts had expected lower growth, the IBM share price rose at times by more than six percent in the after-hours trading.
The group recorded significant growth in the cloud business and in the consulting division, with sales increasing by 16 percent to USD 6.2 billion and by 13.1 percent to USD 4.75 billion. Net income also rose significantly by 76 percent to $2.33 billion. CFO Jim Kavanaugh emphasized that the new IBM looks like this. “We’ve seen very healthy growth in cloud and consulting, which are our core growth areas.”
The figures template shows for the first time how IBM is financially positioned after the spin-off of the IT infrastructure business. In November, CEO Arvind Krishna listed the division under the name Kyndryl in order to focus more on cloud technologies and artificial intelligence (AI) – while Kyndryl operates classic IT infrastructure for customers, such as SAP systems or digital workplaces.
Growth in the consulting division is still in its infancy
The sector has had to struggle with steadily declining sales in recent years and is generally considered to have low margins – IBM is now in a correspondingly strong position without the flagging business. In a telephone conference with analysts, CEO Krishna promised that the consulting business in particular would continue to grow significantly in the coming years.
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“We are still in a very early phase in terms of advice,” said the manager. Many customers are currently considering how they could use new technologies to optimize their business processes. IBM will be able to benefit greatly from this in its new structure.
For the current year, Krishna forecast sales growth in the mid-single digits, with IBM confirming its medium-term goals. Free cash flow is expected to be between $10 billion and $10.5 billion in fiscal 2022, well above the 2021 result of $6.5 billion.
More: SAP competitor Oracle is expanding its presence in the healthcare sector with the deal. For Oracle, it is the largest takeover in the company’s history.