Skip to main content

IBM profits slashed almost in half in 2020, despite cloud growth

(Image credit: Image Credit: Ricochet64 / Shutterstock)

Despite relative success in the cloud market, IBM (opens in new tab) has reported a decline in revenue for both Q4 and its 2020 fiscal year, leading to a significant fall in profits.

On an earnings call, the company reported $20.4 billion in revenue for the fourth quarter of the year, less than the $20.67 billion analysts had anticipated and six percent less than the same period last year. For the full year, the company reported $73.6 billion in revenue, which is 4.6 percent less than in 2019.

Consequently, profits were down 42 percent, from $10.57 GAAP EPS to $6.13, with net income sitting at $5.5bn.

As per a report from The Register (opens in new tab), the company (opens in new tab) was keen to draw attention away from the numbers and towards its 2020 successes. In a statement, CEO Arvind Krishna said:

"We made progress in 2020 growing our hybrid cloud platform as the foundation for our clients’ digital transformations while dealing with the broader uncertainty of the macro environment. The actions we are taking to focus on hybrid cloud and AI will take hold, giving us confidence we can achieve revenue growth in 2021."

The Cloud & Cognitive Software group (which includes Cloud & Data Platforms, Red Hat, Cognitive Applications and Transaction Processing Platforms) recorded revenue of $6.8 billion, down 4.5 percent compared to last year.

However, led by recent acquisition Red Hat, Cloud & Data Platforms grew by nine percent and cloud-specific revenue for the group increased by 39 percent.

The company recorded overall cloud earnings of $25.1 billion in 2020, up 19 percent year-on-year. For the quarter, cloud brought in $7.5 billion in revenue, up 10 percent.

Sead Fadilpašić is a freelance tech writer and journalist with more than 17 years experience writing technology-focussed news, blogs, whitepapers, reviews, and ebooks. And his work has featured in online media outlets from all over the world, including Al Jazeera Balkans (where he was a Multimedia Journalist), Crypto News, TechRadar Pro, and IT Pro Portal, where he has written news and features for over five years. Sead's experience also includes writing for inbound marketing, where he creates technology-based content for clients from London to Singapore. Sead is a HubSpot-certified content creator.