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International Business Machines Corp. shares rose in the extended session Tuesday after the technology giant topped Wall Street estimates on earnings and outlook and turned in a surprise revenue gain driven by the company’s cloud and cognitive software and systems segments.
IBM shares rose 4% after hours, following a 0.6% rise in the regular session to close at $139.17. In comparison , the Dow Jones Industrial Average DJIA, -0.52% closed down 0.5%, the S&P 500 index SPX, -0.27% declined 0.3%, and the tech-heavy Nasdaq Composite Index COMP, -0.19% slipped 0.2%.
The company reported fourth-quarter net income of $3.67 billion, or $4.11 a share, compared with $1.95 billion, or $2.15 a share, in the year-ago period. Adjusted earnings were $4.71 a share.
Revenue rose to $21.78 billion from $21.76 billion in the year-ago quarter.
Analysts surveyed by FactSet had forecast earnings of $4.69 a share and a revenue decline to $21.64 billion.
IBM reported cloud and cognitive software revenue of $7.24 billion, while analysts expected $7.14 billion, and systems revenue was $3.04 billion versus the $2.83 billion Street view. Global technology services revenue came in at $6.95 billion while the Street expected $7 billion. Global business services revenue was $4.24 billion while the Street had forecast $4.27 billion.
IBM expects adjusted earnings of “at least $13.35” a share in 2020, while analysts forecast $13.28 a share.
“We ended 2019 on a strong note, returning to overall revenue growth in the quarter, led by accelerated cloud performance,” said Ginni Rometty, IBM chairman, president and chief executive, in a statement.
“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,” she said.
Of the 20 analysts who cover IBM, five have buy or overweight ratings, 13 have hold ratings and two have sell or underweight ratings, with an average price target of $148.53.
