IBM reports earnings beat, but misses on revenue

Published

2 years ago

July 19, 2023

admin

IBM Chairman and CEO Arvind Krishna appears on a panel session at the World Economic Forum in Davos, Switzerland, on Jan. 17, 2023.

Stefan Wermuth | Bloomberg | Getty Images

IBM reported second-quarter earnings on Wednesday that topped analysts’ estimates as the company expanded its gross margin. Revenue missed consensus estimates.

Shares of IBM were little changed in extended trading after the report.

Here’s how the company did:

Earnings: $2.18, adjusted, versus $2.01 per share expected, according to Refinitiv.
Revenue: $15.48 billion, versus $15.58 billion expected, according to Refinitiv.

Net income for the quarter rose 13% to $1.6 billion from $1.4 billion, or $1.72 per share, a year earlier. IBM’s adjusted gross margin of 55.9% was higher than the Street Account estimate of 54.7%. Revenue was virtually flat from a year earlier.

IBM CFO James Kavanaugh, in a statement, attributed the company’s expanding gross margin to a more profitable mix of products — software was the company’s fastest growing division — as well as “productivity initiatives.” IBM announced 3,900 job cuts in January as part of a broader downsizing across the tech sector.

IBM reiterated on Wednesday that it expects between 3% and 5% revenue growth through the end of the year in constant currency. The company forecasts about $10.5 billion in free cash flow in 2023.

IBM’s largest division, its software segment, reported $6.6 billion in sales, which was up over 7% from a year ago. Software includes products such as its Red Hat Linux operating system and security software.

The part of that division that grew the fastest was data and artificial intelligence products, which were up 10% from a year earlier.

In May, IBM billed WatsonX as a development studio for companies to “train, tune and deploy” machine-learning models, 15 months after the company sold its Watson Health unit.

CEO Arvind Krishna referenced the significance of AI several times in a prepared statement.

“We continue to respond to the needs of our clients who seek trusted, enterprise AI solutions, and we are particularly excited about the response to the recently launched WatsonX AI platform,” Krishna said.

IBM’s consulting segment grew nearly 6% on an annual basis to $5 billion in sales.

The company’s infrastructure division, which includes its mainframe sales, declined 14.6% to $3.6 billion in revenue. The drop was driven by lower revenue from its Z Systems servers, which were down 30%.

Technology

AMD announces $6 billion buyback; shares climb 6%

Published

4 hours ago

May 14, 2025

admin

AMD announces billion buyback; shares climb 6%

Lisa Su, president and CEO of AMD, talks about the AMD EPYC processor during a keynote address at the 2019 CES in Las Vegas, Nevada, U.S., January 9, 2019.

Steve Marcus | Reuters

AMD said on Wednesday that its board of directors approved $6 billion in share buybacks. The stock climbed 6%.

The authorization is in addition to $4 billion in existing approved share repurchases, the company said.

“Our expanded share repurchase program reflects the Board’s confidence in AMD’s strategic direction, growth prospects, and ability to consistently generate strong free cash flow,” AMD CEO Lisa Su said in a statement.

Chinese tech giant Tencent posts 13% revenue jump as growth at key gaming unit surges

Published

9 hours ago

May 14, 2025

admin

Chinese tech giant Tencent posts 13% revenue jump as growth at key gaming unit surges

Chinese tech company Tencent is a gaming giant and the parent company of WeChat, the ubiquitous social messaging app in China.

Cheng Xin | Getty Images News | Getty Images

Tencent on Wednesday reported an annual rise in its top and bottom line in the first quarter fuelled by accelerated growth in its key gaming business.

While revenue beat expectations, its net profit fell short.

Here’s how Tencent did in the first quarter of 2025 versus LSEG estimates:

Revenue: 180.02 billion Chinese yuan ($25 billion), versus 174.63 billion yuan expected
Net profit: 47.8 billion yuan, versus 52.2 billion yuan expected

Revenue rose 13% year-on-year, while net profit was up 14%.

This breaking news story is being updated.

Technology

Sony shares rise about 2% in volatile trading following share buyback announcement

Published

12 hours ago

May 14, 2025

admin

Sony shares rise about 2% in volatile trading following share buyback announcement

A file photo of Hiroki Totoki, Sony Group Corporation executive, delivering a keynote address at CES 2025 in Las Vegas, on January 6, 2025.

Artur Widak | Nurphoto | Getty Images

Sony Group shares rose about 2% Wednesday in volatile trading after the Japanese conglomerate announced a 250 billion yen ($1.7 billion) share buyback and operating income beat estimates.

Operating income for the last three months of the financial year came in at 203.6 billion yen, beating mean analyst estimates of 192.2 billion yen, though it was down 11% from the same period last year.

In the earnings report, the Japanese-based electronics, entertainment and finance company announced a stock buyback of shares worth 250 billion yen.

Sony also provided details on a partial spinoff of its financial unit. The company plans to distribute slightly more than 80% of the shares of common stock of the spinoff to shareholders of Sony Group through dividends.

The financial unit will list its financial operation this year and will be classified as a discontinued operation in Sony’s accounting from the current quarter, the company added.

However, Sony’s outlook for the current financial year ending in March was lackluster.

The company forecasted its operating profit to rise a slight 0.3% to 1.28 trillion yen, after flagging a 100 billion yen hit from U.S. President Donald Trump’s trade war.

Yet, Sony clarified that the estimated tariff impact did not reflect the trade deal made between the U.S. and China on May 12 and that the actual impact could vary significantly.