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Cloud computing drives upturn in IBM quarterly revenue

(Image credit: Image Credit: Majestic B / Shutterstock)

IBM is expecting to surpass analyst expectations after reporting “surprise growth” in quarterly revenue. Helped by solid figures from high-margin cloud computing business, the company’s shares rose more than four per cent.

IBM reported a rise of 21 per cent for the quarter for its cloud business to reach $6.8 billion. That being said, the company reported an adjusted profit of at least $13.35 per share for the year. Analysts had estimated $13.29.

Gross profit margin has also been adjusted to nearly 52 per cent for the quarter. That represents a rise of 230 basis points – the highest in more than a decade.

The cloud and cognitive segment has had its revenue rise by 8.7 per cent, to $7.2 billion for the fourth quarter. It’s worth noting that Red Hat, IBM’s latest $34bn acquisition, falls under this category, as well.

The global technology services segment (including data centre business) has had a poorer quarter, reporting 4.8 per cent less revenue ($6.9bn), compared to the same period last year.

For overall revenue, there’s been an increase of 0.1 per cent, to $21.78 billion. This also represents the company’s first rise in a year and a half.

Reuters says that in the past few years, IBM’s CEO Ginni Rommety has focused on transforming the company to cloud computing, through a series of acquisitions and selling-off of legacy businesses.