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International Business Machines Corp.’s stock was riding more than 5% higher in Wednesday’s extended session after the technology giant topped profit expectations for the latest quarter and called out an uptick in artificial-intelligence demand.
The company posted net income of $3.3 billion, or $3.55 a share, compared with $2.9 billion, or $2.96 a share, in the year-earlier period. On an adjusted basis, IBM
IBM,
earned $3.87 a share from continuing operatings, whereas analysts were modeling $3.79 a share.
Revenue rose to $17.4 billion from $16.7 billion, while the FactSet consensus was for $17.3 billion. The company saw a 3% increase in software revenue, a 6% bump in consulting revenue, and a 3% uptick in infrastructure revenue.
Within the company’s software segment, which brought in $7.5 billion in total revenue, the company saw 8% growth in sales from Red Hat. Meanwhile, software revenue classified as tied to data and artificial intelligence rose by 1%.
“Client demand for AI is accelerating and our book of business for WatsonX and generative AI roughly doubled from the third to the fourth quarter,” Chief Executive Arvind Krishna said in an earnings release.
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Looking at the full year, IBM’s management models revenue growth “consistent with its mid-single-digit model” in constant currency, while foreign exchange is expected to impact top-line growth negatively by roughly one percentage point.
IBM is also looking for approximately $12 billion in 2024 free cash flow.
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