IBM ends 2019 on a 'strong note'

(Sharecast News) - International Business Machines (IBM) updated the market on its fourth quarter and full-year numbers for 2019 on Wednesday, reporting GAAP earnings per share from continuing operations of $4.11 (£3.15) for the final three months of the year, and operating, non-GAAP earnings per share of $4.71.

The US-based technology giant said its revenue was ahead 0.1% in the fourth quarter, to $21.8bn, or up 1% adjusting for currency, and up 3% adjusting for divested businesses and currency,

Red Hat revenue was 24% in the period, after being normalised for "historical comparability".

IBM reported revenue growth in both its cloud and cognitive software, and systems segments, with cloud and cognitive software revenue up 9% and systems ahead 16%.

Total cloud revenue was $6.8bn, up 21%, or 23% adjusting for divested businesses and currency.

The company's GAAP gross profit margin in the fourth quarter was up 190 basis points, and its operating, non-GAAP gross profit margin was 230 basis points higher.

Debt reduced by $10bn since the company closed the Red Hat acquisition, the board reported.

Looking at the full 2019 year, IBM said GAAP earnings per share from continuing operations totalled $10.57, while operating, non-GAAP earnings per share were $12.81.

Revenue was down 3.1% year-on-year at $77.1bn, but was up 0.2% after adjusting for divested businesses and currency.

Total cloud revenue was $21.2bn for the year, up 11%, or 14% after adjusting for divested businesses and currency.

Net cash from operating activities was $14.8bn for the year, and free cash flow came in at $11.9bn.

Looking at its 2020 expectations, IBM said it was forecasting GAAP earnings per share of at least $10.57, and operating, non-GAAP earnings per share of at least $13.35.

Free cash flow was expected to be around $12.5bn.

"We ended 2019 on a strong note, returning to overall revenue growth in the quarter, led by accelerated cloud performance," said chairman, president and chief executive officer Ginni Rometty.

"Looking ahead, this positions us for sustained revenue growth in 2020 as we continue to help our clients shift their mission-critical workloads to the hybrid cloud and scale their efforts to become a cognitive enterprise."