ARMONK (dpa-AFX) - International Business Machines Corp. (IBM) Tuesday reported a profit and revenues for the fourth quarter that trumped Wall Street estimates. Moving ahead, the company detailed a strong outlook for the full year 2019. Shares of the company gained 6 percent in extended hours following the news.
Armonk, New York-based IBM reported fourth-quarter profit of $1.95 billion or $2.15 per share, compared with a loss of $1.05 billion or $1.14 per share last year.
Excluding one-time items, earnings from continuing operations were $4.87 per share, down from $5.14 per share last year. Analysts had a consensus earnings estimate of $4.84 per share for the quarter.
IBM's fourth-quarter revenues rose to $21.76 billion from $22.54 billion last year. Analysts polled by Thomson Reuters expected revenues of $21.75 billion for the quarter.
IBM is divesting off its low-margin and unprofitable hardware businesses to improve profitability. The company is now striving hard to make IBM a company that provides cloud computing and data analytics.
Chief Executive Ginni Rometty said 'In 2018 we returned to full-year revenue growth, reflecting growing demand for our services and leadership solutions in hybrid cloud, AI, analytics and security. Major clients worldwide, such as BNP Paribas, are turning to the IBM Cloud and our unmatched industry expertise to transform their businesses and drive innovation.'
Total cloud revenue for the full year was $19.2 billion, up 12 percent. The annual exit run rate for as-a-service revenue increased to $12.2 billion, up 18 percent.
Looking forward to 2019, the company expects adjusted earnings of at least $13.90 per share. Analysts currently estimate earnings of $13.84 per share.
IBM closed Tuesday's trading at $122.52, down $1.30 or 1.05%, on the NYSE. The stock, however, gained $7.58 or 6.19% in the after-hours trading.
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