IBM Posts Upbeat Q4 Results; Shares Rise 2.5%

Technology major International Business Machines Corp. (NYSE: IBM), popularly known as IBM, has reported strong results for the fourth quarter ended December 31, 2021. The upbeat results can be attributed mainly to the robust growth witnessed in total revenues.

Following the results, shares of the company rose roughly 2.5% on Monday.

Revenue & Earnings

Quarterly revenues of $16.7 billion were up 6.5% from the same period last year. Moreover, the figure surpassed the consensus estimate of $15.98 billion. A rise of 8.2% and 13.1% in software revenues and consulting revenues, respectively, were the primarily drivers of the overall revenue growth for the company.

The company’s earnings per share (EPS) for the quarter stood at $3.35, up 78% from the prior year. The figure also surpassed the consensus estimate of $3.14 per share.

Further, the company reported a gross profit margin of 56.9% for the quarter, a decline of of 58.9% from the previous year.

CEO’s Comments

The CEO of IBM, Arvind Krishna, said, “We increased revenue in the fourth quarter with hybrid cloud adoption driving growth in software and consulting. Our fourth-quarter results give us confidence in our ability to deliver our objectives of sustained mid-single digit revenue growth and strong free cash flow in 2022.”

Stock Rating

The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 4 Buys, 3 Holds and 1 Sell. The average IBM stock price target of $150.88 implies that the stock has upside potential of 17.1% from current levels. Shares have gained about 13.7% over the past year.

Increased Hedge Fund Trading

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in IBM is currently Positive, as some of the top hedge funds that were active in the last quarter increased their cumulative holdings by 7,600 shares.

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