IBM's Stock Falls Following 2020 Weaker Revenue Results; Company Says Progress Will Show in 2021
By Maria Armental
International Business Machines Corp.'s stock traded down
Friday, a day after reporting December quarter financial results,
including revenue that missed Wall Street expectations.
Shares were recently trading at $118.98, down 10% for the day
and about 17% over the past 12 months.
The tech icon--which is in the process of separating its managed
infrastructure services business in what would be its biggest
business exit--had already warned that the quarter's revenue
results would reflect customers' spending adjustments during the
pandemic as well as product cycles and year-earlier
On Thursday, company officials said fourth-quarter revenue fell
6.5% to $20.37 billion, short of "typical seasonality" and
During IBM's conference call to discuss the financial results,
Bernstein analyst Toni Sacconaghi zeroed in on the revenue
"At least in my eyes, it looks significantly worse," Mr.
Sacconaghi said, adding that setting aside the challenges that
company officials had already flagged like year-ago comps, "the
elephant in the room is, how do you know that there isn't something
more sinister afoot here?"
IBM officials assured investors that they expect the company to
return to revenue growth in 2021 at current spot rates, with
stronger performance in the second half of the year.
Chief Executive Arvind Krishna, who has called revenue growth
"the most important metric," said that IBM was making progress in
its turnaround and that that progress would be reflected in the
company's results in 2021. But "we know it's not necessarily going
to be a straight line," he said, noting that the operating
environment remains difficult as the most recent results
Mr. Krishna said IBM, which had a reputation for being too slow
to respond, is changing its culture to one of "growth and
entrepreneurial mindset," a critical part of his transformational
On Thursday, he again referred to that, saying that IBM was
"encouraging more business risk-taking and ensuring a higher
tolerance for failure across the business. This should allow us to
more quickly respond to clients, seize more opportunities, and
drive better business outcomes."
Write to Maria Armental at firstname.lastname@example.org
(END) Dow Jones Newswires
January 22, 2021 13:05 ET (18:05 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.