IBM beat Wall Street expectations for revenue and net income in its latest earnings report Monday. And there are signs IBM’s new focus on cognitive and cloud computing as well as analytics may be paying off.
Data in the earnings report “underscore that the company is beginning to find an inflection point,” Bill Kreher, an analyst with Edward Jones & Co., told Bloomberg news. “We may begin to see the company grow as a whole as soon as next year.”
IBM did stand by revenue guidance, which Kreher sees as a positive sign, according to Reuters.
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“Investors were a little bit nervous about the guidance, and they’ll find a little relief that the company maintained that, despite some headwinds associated with their high sales exposure to Europe,” he said.
Reuters noted that IBM’s cloud-based services, security software and analytics revenue bets “seems to have paid off with a 12 percent rise in revenu.”
However, Big Blue’s income has now declined for 17 consecutive quarters.
IBM reported lower second-quarter net income and revenue, earning $2.5 billion, or $2.61 a share, in the April-June quarter, down from $3.45 billion, or $3.50 a share, a year earlier.
Earnings, adjusted for costs related to mergers and acquisitions and non-recurring costs, came to $2.95 per share in the latest quarter. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $2.89 per share.
The technology and consulting company posted revenue of $20.24 billion in the period, which also beat Street forecasts. Six analysts surveyed by Zacks expected $20.08 billion.
A year ago, its revenue was $20.81 billion.
IBM (NYSE: IBM) shares rose 14 cents to $160 in after-hours trading.
