Last year, IBM experienced their least profitable sales total since 1987, yet they were able to boost their sales by over 6%, and anticipate more growth in 2023 despite layoffs
IBM’s chief executive Arvind Krishna says that the company saw “revenue growth across segments and geographies,” and attributed that to the strength of the company’s hybrid cloud and artificial intelligence strategy.
The IT software giant increased revenue more than 6% in 2022, the biggest sales increase for Big Blue in more than a decade. However, its stock fell in extended trading this week.
Chief Financial Officer James Kavanaugh says IBM’s software business sales grew 8% and consulting revenue rose 9% on a constant currency basis.
In their fourth quarter, earnings report IBM revealed a profit of $2.71 billion, or $3.13 per share, taking in revenue of $16.7 billion, the same as the same period a year before.
Adjusting for expenses related to acquisitions and retirement, and other charges, IBM posted a profit of $3.60 per share, a boost from the $3.35 per share from the previous year.
In an interview with Bloomberg Kavanaugh also said the company will be laying off 1% to 1.5% of its workforce amounting to about 3,900 employee.
During the company’s earnings call, there was no reference to the job cuts. However, according to the company spokesperson, the reductions are mainly connected to a spinoff in 2021, as well as the sale of a healthcare unit, which will cause a $300 million charge to be taken.
IBM experienced an increase in their earnings as a result of their smallest income since 1987 in the year 2021 when they parted with the managed-infrastructure services firm, Kyndryl Holdings Inc. (KD).
Information provided by FactSet, the projected revenue for 2023 is estimated at $60.8 billion, which is only a slight increase. Nevertheless, analysts are predicting that sales will reach $63.38 billion in 2024.
According to Refinitiv data total revenue growth was flat at US$16.69 billion in the quarter ended December 31, compared with analysts’ estimates of US$16.40 billion,
The rise in revenue was largely due to IBMs transition to a “hybrid cloud” approach, where customers are assisted to create their own data centers and make use of use leased computing resources.
