IBM Q4 results: shares jump 5% after earnings revenue beats estimates

IBM stock rises in US after hours trading after beating Wall Street estimates.

IBM logo after IBM Q4 results Source: Bloomberg

International Business Machines(IBM) stock is up in US stock market after hours trading after beating Wall Street estimates in its fourth quarter(Q4) earnings report. IBM earnings were better-than -expected in its Q4 profit report.

IBM earnings: key figures

Earnings per share ( EPS) $4.87
Revenue $21.76 billion
Net income $1.95 billion
Global business services $4.32 billion
Global finances $401 million

IBM earnings

IBM earnings per share were $4.87, more than the $4.82 expected from financial analysts. IBM revenue also exceeded expectations, with $21.76 billion, surpassing the $21.71 billion Wall Street expected. The company’s acquisition of open source technology company Red Hat undoubtedly helped improve IBM profits.

'In 2018 we returned to full-year revenue growth, reflecting growing demand for our services and leadership solutions in hybrid cloud, AI, analytics and security. Major clients worldwide, such as BNP Paribas, are turning to the IBM Cloud and our unmatched industry expertise to transform their businesses and drive innovation,' said chief executive officer (CEO), Ginni Rometty, in a statement.

Key Banc Capital Markets analyst, Arvind Ramnani, said that Red Hat helps IBM rvenue, but there are concerns among investors about the $34 billion deal in the long term.

‘The deal propels IBM as a leading cloud provider and significantly improves its competitive positioning relative to Amazon, Microsoft and Google .... However, based on conversations we have had with investors, the concern has been around the ability for the combined entity to retain Red Hat employees and that IBM may have overpaid at 32x EV/FCF (CY19) for the assets despite the acquisition's transformational potential,’ said Ramnani.

What do IBM Q4 results mean for their share price?

IBM share price should increase after the positive Q4 earnings report. IBM's Q4 earnings should mean that IBM share price will rise from $122.

How do IBM's results compare to other tech stocks?

IBM's results are better than Apple's Q1 guidance before its earnings report. IBM's results are a good sign of possibly positive tech earnings reports later this month.

What is the IBM dividend forecast?

IBM is optimistic about its dividend forecast for Q1. IBM's dividend forecast is $4.82 for its earnings per share. The corporation is also projecting revenue of $21.73 billion. IBM's dividend revenue also includes a projection of free cash flow of $12 billion.

Financial analysts are also bullish on the tech company after IBM's revenue report.

‘We believe the ongoing growth of the Strategic Imperatives unit will return IBM to organic growth in 2019 despite ... currency headwinds,’ Nomura Instinet analysts led by,Jeffrey Kvaal, noted in an e-mail.

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