IBM share price down 5% after Q1 results revenue miss
The tech company's stock falls after a worse-than-expected Q1 earnings report.
IBM share price is down after a mixed Q1 earnings report. IBM’s Q1 earnings per share were high, but IBM’s Q1 revenue fell below Wall Street expectations.
IBM earnings:key figures
| Earnings per share | $2.25 |
| Revenue | $18.18 billion |
| Cloud and Cognitive Software Sales | $5.04 billion |
IBM share price down 5% after missing revenue estimates
IBM’s earnings per share were $2.25, slightly higher than financial experts’ predictions of $2.22. IBM’s Q1 revenue was $18.18 billion, less than the $18.46 billion expected from Wall Street. The corporation’s cloud and cognitive software sales fell by 1% to $5.04 billion, but cloud revenue overall increased 10% each year to its current revenue of $19.5 billion. Chief executive officer, (CEO), Ginni Rometty, touted the success of the company’s cloud services.
‘In the first quarter, our cloud revenue growth accelerated, and we again grew in key, high-value areas in Cloud and Cognitive Software and in consulting. IBM's investments in innovative technologies coupled with our industry expertise and our commitment to trust and security position us well to help clients move to chapter two of their digital reinvention,’ said Rometty.
James Cavanaugh, IBM’s chief financial officer(CFO), also spoke about IBM’s Q1 earnings surpassing estimates.
‘In the first quarter, we significantly expanded profit margins, led by our services businesses. Our focus on prioritizing our investments in the emerging high-value segments of our industry has enabled us to drive higher profitability and strong cash generation, ' said Cavanaugh.
How did IBM’s Q1 earnings compare to other tech stocks?
Compared to software company Adobe, IBM’s Q1 earnings also outperformed and beat estimates. Adobe also had a better-than-expected earnings report.
What is IBM’S 2019 earnings guidance?
IBM offered light guidance for its 2019 earnings. The tech company expects $13.90 earnings per share in 2019 earnings. That figure is slightly less than the $13.91 projected by financial experts.
Will Red Hat help IBM’s earnings in the future?
IBM’s $34 billion acquisition of Red Hat, will be final later in 2019, but financial analysts from Nomura Instinet wrote that the purchase will help IBM’s earnings in future quarters.
‘IBM is winning new, even cloud-native, customers before RHT[ Red Hat]. OpenShift [a Red Hat product] should help IBM win new customers and new workloads as enterprises begin to usher mission-critical applications from on-premise to public or private clouds,’ wrote Nomura Instinet analysts.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get commission from just 0.08% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
