International Business Machines (IBM) 2021 Q1 Financial Results Preview

International Business Machines Corp (NYSE: IBM) started as the computing, tabulating, and recording firm in the late 1800s. Its first major contract was to supply equipment for the tabulation and assessment of the U.S. census in 1890. The company grew over the years and become a leading supplier of computer systems in the late 1990s. However, the company has shifted its focus to cloud computing and AI in recent years. Its current product portfolio ranges from IT services and cloud offerings to artificial intelligence and enterprise software.

IBM recently announced strong financial results for the first quarter, mainly driven by its cloud computing services. The company reported earnings of $955 million, or $1.06 per share for the three months ended March 31, as compared to $1.18 billion, or $1.31 per share in the year-ago quarter. On an adjusted basis, the company earned $1.77 per share, beating the consensus forecast of $1.69 per share.

Revenue inched up 1 percent to $17.73 billion, above analysts’ average estimate of $17.32 billion. If we look at the performance of different segments, revenue from the Cloud & Cognitive Software business rose 3.8 percent to $5.44 billion, while revenue from Global Business Services increased 2.4 percent to $4.2 billion. However, revenue from Global Technology Services slipped 1.5 percent to $6.4 billion.

Commenting on the results, CEO Arvind Krishna said in a statement, “Strong performance this quarter in cloud, driven by increasing client adoption of our hybrid cloud platform, and growth in software and consulting enabled us to get off to a solid start for the year. While we have more work to do, we are confident we can achieve full-year revenue growth and meet our adjusted free cash flow target in 2021.”

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