IBM Reports 25 Trillion KRW Revenue in Q4 Last Year... Records 'Earnings Surprise'

Recorded Sales of 25.45 Trillion KRW

Turnaround in Performance After Five Consecutive Quarters of Sales Decline

Cloud Computing Drives Strong Performance

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kwon Jaehee] IBM posted an earnings surprise in the fourth quarter of last year.

According to the Wall Street Journal (WSJ) and others on the 21st (local time), IBM's sales in the fourth quarter of last year amounted to $21.875 billion (approximately 25.45 trillion KRW). Earnings per share (EPS) recorded $4.71, down about 3%.

This exceeded market expectations compiled by financial information provider Refinitiv, which forecasted EPS of $4.69 and sales of $21.64 billion.

Although IBM had recorded sales declines for five consecutive quarters, sales in the fourth quarter of last year rose 0.1% year-on-year, marking a performance turnaround.

The growth in performance was driven by cloud computing. IBM has been focusing on fostering cloud computing as a new business. To this end, IBM invested $24 billion (approximately 39.6 trillion KRW) last year to acquire Red Hat, an open-source software company specializing in cloud and other areas. As a result, IBM's cloud computing sales in the fourth quarter increased 21% year-on-year to $6.8 billion, marking an all-time high.

Following the earnings surprise news, IBM's stock price also rose. IBM's stock price increased 3.5% in after-hours trading.

Riding on the strong performance driven by cloud computing, IBM presented an optimistic outlook for this year as well. IBM stated that its EPS is expected to rise from $12.81 last year to over $13.35 this year.

IBM CEO Ginni Rometty said, "Sustained revenue growth is expected in 2020 as well."