Big Blue IBM has released its Q2 results on Monday and beats on the top and bottom lines, with cloud demand helping lift sales. Stronger than analysts’ earnings lifted the company’s shares 4 percent in extended trading on Monday.
IBM reported adjusted earnings of 2.33 USD per share on revenue of 18.7 USD billion. However, analysts expected the company’s earnings at 2.31 USD per share on revenue of 18.3 billion USD.
The company’s revenue climbed more than 3 percent compared to the same period a year ago. The quarter is its second quarter of revenue growth and its best quarter in more than three years.
IBM is in a significant multiyear transformation aiming to develop and expand an open hybrid cloud platform, a 1 trillion USD market opportunity.
Hybrid cloud architecture means IBM can provide clients a public and private cloud, which gives any organization extra network security.
Total cloud revenue in the second quarter IBM results increased 13 percent to 7 billion USD, and cloud computing is now 38 percent of the company’s total revenue.
IBM is in the process of spinning off its 19 billion USDD managed infrastructure business. That will allow IBM to focus more closely on cloud computing and artificial intelligence. The spinoff is assumed to be completed by year-end.
Arvind Krishna, Chairman and Chief Executive, IBM, said, “Client adoption of hybrid cloud platform helped to achieve strong performance in the second quarter in Global Business Services and software and drove improved overall revenue growth.”
IBM’s Global Technology Services segment, containing managed services, outsourcing, and support, delivered 6.34 billion USD in revenue.
In the quarter, IBM spent 1.75 billion USD on acquisitions, the most in a single quarter as the company closed the 34 billion USD Red Hat deal in the third quarter of FY2019.
The company is acquiring process-mining software company myInvenio,
application-management company Turbonomic, and Salesforce consulting company Waeg.
In addition, the company announced 2-nanometer chip technology and new AI features for its Watson Studio Software for building models.