Profit IBM T2 2019

IBM shares climbed 4% on Wednesday after the company announced better than expected results in the second quarter.

Here are the key figures:

• Earnings: $ 3.17 per share, excluding certain items, versus $ 3.07 per share as expected by badysts, according to Refinitiv.
• Returned: $ 19.16 billion, as opposed to $ 19.16 billion as forecast by badysts, according to Refinitiv.

IBM's revenue fell 4 percent year-over-year, as revenue rose 3 percent, the company said in a statement. Year-over-year revenues have now decreased for the fourth consecutive quarter.

IBM's largest business, Global Technology Services, which includes technology support services, as well as infrastructure and cloud services, generated $ 6.84 billion in revenue, a decrease of nearly 7% and less than the 7 billion consensus expected by badysts FactSet.

The GTS business "shrank by about 3% as the company repositioned its portfolio to increase profitability and growth," Stifel badysts, led by David Grossman, wrote in a note on July 9th. "Declines are expected to remain at these levels throughout the year as the company moves away from low-capital-intensive activities and eliminates low growth / portfolio margin relationships."

The Cloud and Cognitive Software unit, including cloud and data platforms, cognitive applications and transaction processing platforms, generated $ 5.65 billion in revenue, more than the estimate. consensus of $ 5.55 billion established by FactSet.

IBM's Global Business Services business, which includes application management, consulting, and global processing services, generated revenue of $ 4.16 billion, slightly less than $ 4.17 billion from FactSet.

Systems revenue was $ 1.75 billion, down nearly 20% and close to FactSet's average estimate of $ 1.82 billion. According to IBM, the growth of the Power product line more than offset the impact of the "product cycle dynamics" in the company's storage products and Z mainframe computers. The Z line in recent quarters has helped increase IBM's revenue as companies upgrade, but now makes comparisons more difficult.

In the second quarter, IBM announced a partnership with Cloudera and the sale of trading and marketing software to funds advised by affiliates of Centerbridge Partners. The company also announced layoffs.

IBM completed its $ 34 billion acquisition of Red Hat earlier this month.

"Earlier in July, we had reduced our estimates of net earnings per share while highlighting the risk that management should go back," commented Jim Kelleher, an badyst at Argus Research, in a note distributed to customers on Thursday. "Even with the acquisition of Red Hat, we remain concerned that IBM may have lost momentum in its strategic transformation." Kelleher has a note of keeping on the stock.

IBM has reiterated its forecast for the entire year of earnings per share of at least $ 13.90, excluding certain items such as Red Hat. This corresponds to badysts' estimates, according to Refinitiv.

The company announced that it would provide information on the impact of Red Hat on Aug. 2.

IBM shares have increased by approximately 26% since the beginning of 2019.

Leaders will discuss the results with badysts at a 17:00 teleconference. Eastern Time.

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