RESEARCH TRIANGLE PARK – IBM isn’t immune to the coronavirus, and its second quarterly earnings attest to that reality.
Big Blue’s adjusted earnings dropped 31 percent to $2.18 per share, the company announced on Monday.
That’s still better than analysts had expected – around $2.07 per share according to Refinitiv.
Revenue, meanwhile, declined 5 percent to $18.12 billion, versus $17.72 billion as expected.
However, there is a silver lining.
Revenue from the Cloud and Cognitive Software business, which includes Cloud and Data platforms like Red Hat, totaled $6.3 billion, up 3 percent.
Buoyed by Red Hat profits, IBM’s CEO sees ‘progress’ in shift to cloud and AI
Total cloud revenue, meanwhile, of $23.5 billion over the last 12 months, up 20 percent (up 23 percent adjusting for divested businesses and currency) — exactly one year since IBM bought the open-source software firm Red Hat for $34 billion.
Red Hat revenue up 17 percent (up 18 percent adjusting for currency), normalized for historical comparability.
It’s now the second report since its new CEO Arvind Krishna took over the helm on April 6, just as the coronavirus had begun strike – and it marks the beginning of a new era.
Krishna, who played a big part in closing the Red Hat purchase, is pushing for IBM to expand into cloud and artificial intelligence. But analysts are still questioning if it’s paid off.
IBM’s stock continues to lag behind industry leaders such as Microsoft, Amazon and others.
In May, Krishma started to make sweeping changes with a massive round of layoffs in the “thousands.”
IBM employs thousands of people across North Carolina, with its largest corporate campuses based in RTP.
With this latest earnings, Krishna remains steadfast.
“Our clients see the value of IBM’s hybrid cloud platform, based on open technologies, at a time of unprecedented business disruption,” he said in a statement.
“We are committed to building, with a growing ecosystem of partners, an enduring hybrid cloud platform that will serve as a powerful catalyst for innovation for our clients and the world.”
