International Business Machines Corporation (IBM) reported declining Q4 2020 revenue falling short of analyst’s estimates. The company reported earnings of $2.07 per share, versus $1.79 per share as expected by analysts. Revenue of $20.37 billion was reported versus $20.67 billion estimated by analysts. Revenue dropped 6% on an annualized basis, a sharp decline in five years and also marked its fourth consecutive quarter with declining figures.
“The challenging environment we have seen since March continued with the shift in clients buying behaviors and priorities,” “Giving the level of macroeconomic uncertainty, more clients tended to move toward shorter duration engagements impacting our software revenue.” stated Jim Kavanaugh, IBM’s chief financial officer, on a conference call with analysts.
IBM’s Cloud and Cognitive Software segment that includes Red Hat reported $6.84 billion in revenue, a 5% drop year over year. The Global Technology Services unit stood at $6.57 billion in revenue, which was down 6% and below the $6.92 billion estimates. Global Business Services unit, which includes consulting announced $4.17 billion, reporting a 3% decline. Systems revenue from sales of mainframe computers and other hardware came at $2.50 billion, an 18% decline and below the $2.26 billion estimates.
The company’s earnings per share dropped 66%, the sharpest decline in three years, primarily because of a $2.04 billion pre-tax charge for structural actions in the quarter. The company did not announce its formal earnings guidance, but expects revenue growth in 2021, along with $11 billion to $12 billion in free cash flow.
Dow 30 component International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. To learn more about International Business Machines Corp (IBM) and to track its ongoing progress please visit the Vista Partners IBM Coverage Page.
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