IBM Reports the Highest Sales Growth in Over Two Years
IBM recorded highest quarterly sales growth in more two years and beat analysts' estimates. The results were boosted by the company's bets in the cloud computing business.
Total revenue rose nearly 1% to $17.73 billion in the quarter, beating analysts' estimate of $17.35 billion. Net income fell to $955 million, or $1.06 per share, in the quarter from $1.18 billion, or $1.31 per share, a year earlier. Excluding items, the company earned $1.77 per share, beating market expectation of $1.63.
Sales from cloud computing services jumped 21% to $6.5 billion in the quarter. Finance chief James Kavanaugh said cloud spending by clients in retail, manufacturing and travel industries in the United States was picking up after the initial pandemic-driven slump. IBM is preparing to split itself into two public companies, with the namesake firm narrowing its focus on the so-called hybrid cloud, where it sees a $1 trillion market opportunity.
IBM reported a sales decline in global technology services, its largest unit, but that was largely offset by a rise in revenue in the remaining three units, including a surprise growth in the business that hosts mainframe computers. Mainframe saw strong traction from the financial services industry, where its banking clients shopped for more capacity as trading volumes soared during the retail trading frenzy.