International Business Machines Corporation ($IBM) Earnings (Q1 FY22)

International Business Machines Corporation ($IBM) Earnings and Opinion: 


International Business Machines is a company in the Technology sector and operates in the Information Technology Services industry. The company provides integrated solutions and services worldwide. International Business Machines was founded in 1911 and is currently headquartered in Armonk, New York. The company made its debut on the stock market in 1970.

International Business Machines EPS and Revenue (Q1 FY22):

  • EPS of $1.40 beating expectations of $1.39
  • Revenue of $14.2B beating expectations of $13.84B
International Business Machines Q1 Highlights:
  • Revenue up 8% (YOY)
  • Net Income of 1.3B, up 25% (YOY)
  • Free cash flow of $1.2B 
International Business Machines FY22 Outlook:
  • Revenue growth at high-end of the middle single digit range
  • Company expects $10B-$10.5B in consolidated FCF
Opinion:
International Business Machines has been increasing in stock price since the reporting of their earnings. The company beat expectations in both the revenue and EPS categories. They were able to grow revenues by 8% year-over-year and they also grew their net income by an impressive 25% on a year-over-year basis. IBM was able to attain $1.2B in free cash flow and hopes to increase that number to $10-10.5B by the end of the fiscal year. They also expect revenue growth to be in the upper single digit range. A lot of the positive sentiment surrounding the stock has to do with the fact that they were able to increase their software and consulting power over the last quarter. There is a lot of demand surrounding the Hybrid Cloud service IBM has to offer and also the increase in AI demand growing. This company could end up playing a vital role in the AI world once we get closer to that. I know some major service companies are starting to test out robots for simple tasks to make up for the labor shortage incurring right now. This is where IBM can separate themselves from the rest of the industry. Personally, I got into IBM a while back just to diversify my portfolio, and it has paid off. The stock came with a lot of fluctuation, especially after missing a recent quarter's expectations and then the spinoff of Kyndryl. These hurt the stock, but it has recovered nicely and I have been reinvesting the dividends they pay out. I can see some upside with the company, especially if we see a transition to AI in some service businesses. 


*Information from Yahoo Finance, IBM, and Nasdaq
*Estimates attained from Zacks

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