IBM Revenue Grows for the First Time Since 2012

By Ted Greenwald

International Business Machines Corp. reported higher revenue for the first time in 23 quarters and signaled continued growth into 2018, giving Chief Executive Ginni Rometty breathing space as she tries to turn around the century-old tech giant.

Fourth-quarter revenue rose 3.6% to $22.54 billion from a year earlier. The last time IBM had revenue growth from the prior year was the first quarter of 2012, Ms. Rometty's first as chief.

IBM said it took a $5.5 billion charge related to the new U.S. tax law, pushing it into the red. In all, the company reported a quarterly loss of $1.05 billion, or $1.14 a share, compared with profit of $4.5 billion, or $4.72 a share, a year earlier.

On an adjusted basis, IBM had profit of $5.18 a share, a penny more than the $5.17 expected by analysts, according to Thomson Reuters.

James Kavanaugh, IBM's new finance chief, said the company is "ahead of track" in its previously stated goal of generating $40 billion in revenue over 12 months from newer, fast-growing businesses by the end of 2018.

"That gives us the confidence to say we're going to grow revenue overall in 2018," said Mr. Kavanaugh.

Since becoming CEO, Ms. Rometty has struggled to shift IBM from older, shrinking businesses such as selling and maintaining equipment in customers' own facilities to newer ones that promise rapid growth.

She has staked out a position helping large corporate customers integrate their operations with the cloud, and has focused on buzzy areas such as artificial intelligence and the internet-based ledger technology known as blockchain.

But growth has been elusive, as even high-profile initiatives such as its Watson AI, a collection of cloud tools as well as apps for industries including medicine and finance, haven't had a considerable positive impact on finances.

Even some of Ms. Rometty's biggest fans have lost patience. IBM's largest and arguably most prominent stakeholder -- Warren Buffett's Berkshire Hathaway Inc., which sank more than $10 billion into buying a 5.4% stake in 2011 -- sold more than half its holdings last year. Berkshire held about 37 million shares as of Sept. 30.

Write to Ted Greenwald at Ted.Greenwald@wsj.com

(END) Dow Jones Newswires

January 18, 2018 16:28 ET (21:28 GMT)

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