IBM Reports Higher 1Q Revenue
By Maria Armental
International Business Machines Corp. posted higher revenue
ahead of landmark split of the business this year that is part of
Chief Executive Arvind Krishna's plan to revive growth at the
veteran tech company.
IBM Monday said first-quarter sales rose about 1% to $17.73
billion, generating net income of $955 million. Wall Street on
average expected sales of $17.32 billion and net income of $1.28
billion, according to FactSet.
Mr. Krishna, in the job almost a year, has pledged to restore
growth at IBM this year after a prolonged period of stagnation. The
company is preparing to spin off a major part of its
information-technology services operations.
Mr. Krishna said he would focus IBM on the booming field of
cloud-computing and artificial intelligence. IBM has undertaken a
number of acquisitions to bolster both areas, including acquisition
of software company Red Hat that closed in 2019, to strengthen its
efforts in the so-called hybrid-cloud where customer mix on-site
and cloud-based data storage and processing tools. IBM last week
said it had agreed to buy for an undisclosed amount a small Italian
company, called myInvenio, that it said would advance both its AI
and hybrid cloud activities.
IBM said its total cloud revenue rose about 21% in the latest
period to $6.5 billion.
The company last week said that the services business it plans
to spin off by the end of this year would be called Kyndryl and be
based in New York City. It will be run by IBM veteran Martin
The IT services operations that IBM is partly shedding were
central to former Chief Executive Lou Gerstner's drive in the 1990s
to transform the company from a lumbering tech giant focused on
computing hardware to a huge player in services that were booming
at the time. The spinoff announcement comes a few months after the
Armonk, N.Y., company said it was eliminating an unspecified number
IBM also is exploring the potential sales of Watson Health, The
Wall Street Journal previously reported. The unit, which employs
artificial intelligence to help hospitals, insurers and drugmakers
manage their data, was once a flagship initiative for Mr. Krishna's
predecessor, Ginni Rometty, isn't currently profitable, people
familiar with the matter have said.
IBM stock rose 4% to $138.44 in after-hours trading.
Write to Maria Armental at firstname.lastname@example.org
(END) Dow Jones Newswires
April 19, 2021 16:31 ET (20:31 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.