Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

IBM beats first-quarter profit estimates, signals demand holding up

IBM beats first-quarter profit estimates, signals demand holding up

By Chavi Mehta

(Reuters) -IBM Corp beat Wall Street expectations for first-quarter profit on Wednesday and signaled demand for IT services was better than feared, sending shares up 3.5% after the bell.

The company’s software and consulting businesses rose 6% and 8.2%, respectively, at constant currency in the first quarter, in line with IBM’s targets. Big Blue also reiterated its full-year free cash flow forecast of $10.5 billion.

“Investors blew a sigh of relief that IBM’s quarterly update was better than feared,” said Jesse Cohen, senior analyst at Investing.com.

The IT industry is facing a slowdown after a post-pandemic surge in demand for services such as consulting, as high inflation and interest rates have forced customers to put the brakes on spending. Growth at IBM’s consulting and software business has also slowed down from the mid-to-high teens it saw last year.

IBM Chief Executive Officer Arvind Krishna said clients were prioritizing digital transformation projects that focus on “cost takeout, productivity and quick returns”, mirroring comments by Accenture executives last month.

As a result, IBM cut its full-year consulting revenue growth forecast to 6%-8% from earlier expectations of high single-digit percentage growth.

Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking and Finance Review, Alpha House, Greater London, SE1 1LB, https://www.globalbankingandfinance.com/. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

It forecast annual revenue growth between 3% and 5% at constant currency, having said in January it expected revenue to rise at the lower-end of its mid-single-digit target. Analysts on average expect a 3.6% growth, according to Refinitiv data.

Analysts, however, believe IBM is better equipped to weather cuts in corporate IT spending.

IBM also has less exposure to U.S. regional banks and is largely shielded from the banking crisis in the country, with Chief Financial Officer James Kavanaugh noting regional banks make up less than 1% of the company’s revenue in the United States.

Total revenue in the first quarter rose 4.4% at constant currency to $14.25 billion, compared with analysts’ estimate of $14.35 billion.

Excluding items, it reported earnings of $1.36 per share, beating estimates of $1.26.

(Reporting by Chavi Mehta in Bengaluru; Editing by Krishna Chandra Eluri)

 

Recent Post: