IBM reported fourth-quarter results Monday that beat on the top and bottom lines, the tech giant's first earnings report since spinning off Kyndryl, its information-technology services business. The IBM earnings report came after the market close.
Adjusted for the Kyndryl spinoff, IBM reported earnings of $3.35 a share on revenue of $16.7 billion. Analysts expected IBM to report earnings of $3.30 a share on revenue of $16.1 billion. Revenue jumped 6.5% from the year-ago period.
IBM stock jumped 5.7% to 136.10 during after-hours trading on the stock market today.
The company said full-year revenue of $57.4 billion climbed 3.9%. It was IBM's best quarterly and full-year growth since 2011.
IBM completed the spinoff of Kyndryl — formerly known as Managed Infrastructure Services — on Nov. 3. The company says it has reclassified the unit to discontinued operations, and thus removed it from 2019, 2020 and 2021 results. The company reported fourth-quarter results on a continuing-operations basis that excludes Kyndryl.
IBM Earnings: Investing For The Future
IBM spun off the consulting unit so it can focus more intently on cloud computing and artificial intelligence. And it's for the same reason that IBM sold its health care data analytics business from its Watson Health unit to a private equity firm for more than $1 billion.
IBM said hybrid cloud revenue in the quarter jumped 16% to $6.2 billion. For the year, hybrid cloud revenue rose 20% to $20.2 billion.
"In 2021, we continued to invest for the future by increasing R&D spending, expanding our ecosystem and acquiring 15 companies to strengthen our hybrid cloud and AI capabilities," IBM Chief Financial Officer James Kavanaugh said in written remarks. "With the separation of Kyndryl we now have taken the next step in the evolution of our strategy, creating value through focus and strengthening our financial profile."
IBM has undergone a long and massive restructuring. The multiyear transformation of IBM has focused on developing and expanding what the company calls an open hybrid cloud platform. A hybrid cloud architecture means IBM can provide its customers with both a public cloud and a private cloud, which gives a company extra network security.
"Our fourth-quarter results give us confidence in our ability to deliver our objectives of sustained mid-single digit revenue growth and strong free cash flow in 2022," Chief Executive Arvind Krishna said in written remarks.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
