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Launch of the results season for large technology companies, IBM (IBM) released second quarter results Monday evening that beat estimates on the top and bottom lines. IBM stock has soared.
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The company reported adjusted earnings of $ 2.33 per share on revenue of $ 18.7 billion. Analysts expected IBM to report earnings of $ 2.31 per share on revenue of $ 18.3 billion, according to FactSet.
IBM stock rose 2.7%, to nearly 141.70, when trading after hours in the stock market today.
The turnover increased by more than 3% compared to the previous year. This was its second consecutive quarter of revenue growth and its best performance in over three years.
IBM Stock: Multi-year transformation
IBM is in a major multi-year transformation that has focused on developing and expanding what the company calls an open hybrid cloud platform. The company sees a market opportunity of $ 1 trillion in this. A hybrid cloud architecture means that IBM can provide its customers with both a public cloud and a private cloud, giving a business additional network security.
Total cloud revenue in the quarter increased 13% to $ 7 billion. Cloud computing now represents 38% of IBM’s total revenue.
“In the second quarter, customer adoption of our hybrid cloud platform contributed to strong performance in Global Business Services and Software and resulted in improved overall revenue growth,” said Arvind Krishna, President- general manager of IBM, in written remarks with the publication of IBM’s results. “We are pleased with our progress and remain on track to generate full year revenue growth and meet our cash flow target. “
IBM is also in the process of divesting its $ 19 billion managed infrastructure business. This will allow IBM to focus more on cloud computing and artificial intelligence. The spin-off is expected to be completed by the end of the year.
IBM stock is up 10.5% this year.
Please follow Brian Deagon on Twitter at @IBD_BDeagon to learn more about tech stocks, analysis and financial markets.
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