“IBM Shares Surge Over 11% on Strong Q4 Earnings”
IBM Reports Strong Q4 Earnings with Better-than-Expected Results
Shares of IBM soared by over 11% on Thursday following the release of its fourth-quarter earnings report. The company reported better-than-expected earnings per share (EPS) and revenue for Q4.
Revenue and Earnings Exceed Analyst Expectations
IBM posted a fourth-quarter EPS of $3.87, surpassing the consensus projection of $3.77. Revenue for the quarter came in at $17.38 billion, exceeding analysts’ expectations of $17.23 billion.
Detailed Revenue Breakdown
The company’s software revenue reached $7.51 billion, up 3.1% year-over-year, although falling slightly below Wall Street expectations. Consulting segment revenue stood at $5.05 billion, up 5.8% from the previous year. IBM generated $4.6 billion in infrastructure revenue, reflecting a 2.7% year-over-year increase.
Improved Margins and Free Cash Flow
Adjusted gross margin for Q4 stood at 60.1%, higher than the year-ago quarter and analysts’ expectations. Free cash flow reached $6.09 billion, a 17% increase compared to the same quarter last year.
CEO’s Optimistic Outlook
IBM’s Chairman and CEO, Arvind Krishna, expressed optimism about the future, citing growth in all segments driven by the continued adoption of hybrid cloud and AI offerings.
Positive Projections for Future Growth
Looking ahead, IBM anticipates a free cash flow of $12 billion for the full fiscal year and expects its revenue to grow approximately 4-6% in 2024. Analysts at Evercore ISI raised their price target for IBM stock, emphasizing its underappreciated AI portfolio.
Analyst Recommendations
Evercore ISI and BofA Securities analysts raised their price targets for IBM stock and reiterated a positive outlook for the company, highlighting its turnaround and strong cash flow trajectory.
Overall, IBM’s strong Q4 performance and optimistic projections have significantly boosted investor confidence, leading to a surge in share value.
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