IBM stock fell as much as 7% in extended trading on Wednesday. The decline occurred after the company reported revenues of $20.37 billion in the fourth quarter, less than expected $20.67 billion, according to the company’s press release. The company’s earnings per share was $2.07 below the expected $1.79.
- IBM’s revenue of $20.4 billion represented a 6% decline on an annualized basis, the fourth consecutive quarter of decline.
- Revenue declines reflected a challenging environment since the outbreak of the coronavirus pandemic with the shift in clients’ buying behaviors and priorities.
- Total cloud revenue was $7.5 billion in Q4, a 10% rise or up 8%, adjusting for divested businesses and currency.
- Red Hat revenue rose 19% in Q4 or up 17%, adjusting for currency.
- The gross profit margin was 51.7% in Q4, up 70 basis points in Q4, while the operating gross profit margin was 52.5%, up 70 basis points.
- IBM’s debt reduced by $3.9 billion since the end of the third quarter.
- The company’s full-year revenue was $73.6 billion, down 5% year over year.
- IBM did not provide earnings guidance for the full year but expects revenue growth in 2021, along with $11 billion to $12 billion free cash flow.
- IBM also agreed to buy cloud computing services provider Nordcloud for an undisclosed sum in the fourth quarter.
IBM stock is currently declining. IBM: NYSE is down 8.55% on premarket.
