International Business Machines Corp. (NYSE:IBM) is confident that their strategy for their cloud business is on the right track, its Chief Financial Officer, Martin Schroeter said in an interview on CNBC.
International Business Machines Corp. (NYSE:IBM) has just reported its fourth quarter 2014 performance with revenue at $24.1 billion. Earnings was down 4% year-over-year at $5.81 per share, beating Street consensus by about $0.40, while net income from continuing operations was also down 11% to $6.2 billion.
Nonetheless, this does not dampen International Business Machines Corp. (NYSE:IBM)’s outlook on some key parts of its business, particularly its cloud efforts.
“A $7 billion cloud business for us last year growing at 60% which, for us, that’s a pretty big growth number on a pretty substantial business. We think that puts us kind of at the forefront of cloud service providers as well as, in total, we talked about a $25 billion set of businesses focused on these strategic imperatives of ours growing at a solid double digit rate. We see a lot of signposts here that the business is on the right trajectory and that strategy is really paying off,” Schroeter said.
Furthermore, International Business Machines Corp. (NYSE:IBM)’s is upbeat about how they started the current year.
“We feel very good about how we’re starting the year. As I mentioned, we’ve got about $25 billion of revenue in our strategic imperatives and the rest of the business in total is still delivering very high value so we were about to generate about $21 billion of pre-tax income across the entire enterprise,” Schroeter said.
Within the enterprise, Big Blue, led by CEO Virginia Rometty, is clearly moving to higher value and the company sees higher margins finishing 2015, Schroeter said. He said more importantly, Big Blue sees even higher growth margins in the strategic imperatives the company has. There is very good margin opportunities as the company shifts to cloud and analytics, he said.
Warren Buffett’s Berkshire Hathaway held about 70.48 million International Business Machines Corp. (NYSE:IBM) shares by the end of the third quarter.