- IBM projects its second quarter revenue to be between $16.40 billion and $16.75 billion, surpassing the estimate of $16.28 billion.
- The company maintains its full-year revenue forecast at a constant currency increase of at least 5%, slightly higher than the estimated 4.78%.
- Foreign exchange rates are likely to have a positive impact on growth, adding about one to one-and-a-half percentage points.
- IBM continues to expect free cash flow to be approximately $13.5 billion, against an estimate of $13.72 billion.
- In the first quarter, IBM reported revenue of $14.54 billion, a year-over-year increase of 0.5%, exceeding the estimate of $14.4 billion.
- Software revenue rose by 7.4% year-over-year to $6.34 billion, slightly higher than the $6.3 billion expectation.
- The consulting segment experienced a 2.3% year-over-year decline with revenue of $5.07 billion, aligning with expectations.
- Infrastructure revenue fell by 6.2% year-over-year to $2.89 billion, but it still exceeded the estimate of $2.81 billion.
- Financing revenue was recorded at $191 million, a 1% year-over-year decrease, yet higher than the expected $184 million.
- Other revenue experienced a significant drop of 44% year-over-year, down to $61 million.
- IBM’s adjusted gross margin improved to 56.6%, compared to 54.7% from the previous year, beating the estimate of 55.6%.
- The company reported an operating EPS of $1.60, which fell short of the previous year’s $1.68, but surpassed the $1.42 estimate.
- Free cash flow grew by 2.7% year-over-year to $1.96 billion, exceeding the anticipated $1.79 billion.
- CEO Arvind Krishna highlighted strong demand for generative AI, with a business backlog increasing to over $6 billion, an increase of more than $1 billion in the quarter.
- Krishna expresses optimism about long-term growth opportunities in technology and the global economy, despite acknowledging a fluid macroeconomic environment.
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International Business Machines on Smartkarma
Analyst Coverage of International Business Machines on Smartkarma
Analysts on Smartkarma have provided insightful coverage of International Business Machines (IBM) from different perspectives. Tech Supply Chain Tracker‘s latest report on IBM highlighted the vacancy in Intel’s CEO position and the impact of a management shake-up at GF, leading to bearish sentiments in the market. On the contrary, Baptista Research took a bullish stance on IBM, emphasizing the company’s positive fourth-quarter results, with a 3% revenue growth for the year and strong performance in the software segment, showing promising signs for IBM’s future.
In another report by Tech Supply Chain Tracker, the focus shifted to industry trends and innovations impacting IBM, such as TCL’s upcoming tri-fold smartphone launch and advancements in AI chip technology by companies like FuriosaAI and TSMC. Baptista Research also discussed IBM’s strategic positioning in the face of a shifting competitive landscape and erosion of switching costs, highlighting the company’s emphasis on hybrid cloud and artificial intelligence for future growth. These diverse viewpoints from analysts offer investors a comprehensive outlook on the opportunities and challenges facing IBM in the market.
A look at International Business Machines Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 4 | |
| Growth | 3 | |
| Resilience | 3 | |
| Momentum | 5 | |
| OVERALL SMART SCORE | 3.4 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
International Business Machines Corporation (IBM) has received a mixed bag of Smart Scores from Smartkarma, indicating a varied long-term outlook. While the company scored high on momentum with a score of 5, signifying strong upward market momentum, it scored lower on value at 2, growth at 3, and resilience at 3. The dividend score of 4 offers a bright spot, indicating a strong dividend-paying ability. IBM’s overall outlook seems to be geared more towards short-term momentum rather than long-term value or growth.
As a company providing computer solutions with advanced technology, IBM’s strengths lie in its ability to adapt to market trends quickly. However, the lower scores in value and growth may raise concerns for long-term investors looking for stable and consistent returns. Investors may need to closely monitor IBM’s performance in the market to assess whether the high momentum score can be sustained or if there are underlying challenges affecting the company’s overall growth prospects.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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