IBM appoints Martin Schroeter as CEO of NewCo. Image Source: IANS News

San Francisco, Jan 22 : A weak cloud and cognitive software performance saw IBM shares sliding 6.6 per cent after the company missed Q4 revenue estimates, posting its fourth straight quarter of revenue decline.

The Q4 (December 2020 quarter) sales totalled $20.4 billion, down 6 per cent (on-year) and slightly below the $20.63 billion consensus.

Cloud and Cognitive Software sales dropped 5 per cent to $6.8 billion, below the $7.18 billion estimates. Last quarter, this segment was up 7 per cent.

Total cloud revenue was up 10 per cent (on-year) to $7.5 billion.

"We made progress in 2020 growing our hybrid cloud platform as the foundation for our clients' digital transformations while dealing with the broader uncertainty of the macro environment," says CEO Arvind Krishna.

"The actions we are taking to focus on hybrid cloud and AI will take hold, giving us confidence we can achieve revenue growth in 2021," Krishna said in a statement late on Thursday.

The silver lining for the company was that cloud and data platforms grew 9 per cent led by the 19 per cent growth for Red Hat, which IBM acquired for $34 billion in 2018.

For 2021, IBM expects to post annual revenue growth of $11-12 billion.

In the fourth quarter, the company generated net cash from operating activities of $5.9 billion. IBM's free cash flow was $6.1 billion. The company returned $1.5 billion to shareholders in dividends.

For the full year, the company generated net cash from operating activities of $18.2 billion. Free cash flow was $10.8 billion. IBM returned $5.8 billion to shareholders in dividends.

"In 2020 we increased investment in our business across R&D and CAPEX, and since October, announced the acquisition of seven companies focused on hybrid cloud and AI," said James Kavanaugh, IBM senior vice president and chief financial officer.

"With solid cash generation, steadily expanding gross profit margins, disciplined financial management and ample liquidity, we are well positioned for success as the leading hybrid cloud platform company."

-- The story has been published from a wire feed without any modifications to the text

You May Like

Latest Video News:

Entertainment News

Latest News