IBM reports its best financial results in over a decade as its net profits between October and November hit USD 2.3 billion, almost USD 1 billion higher than the previous year, a 72% jump in the fourth quarter. On a quarterly basis, it has risen by over 106% and is approximately USD 976 million higher than the last year’s period.
The profits came on revenue of over USD 16.6 billion in the October-December period, exceeding analysts’ estimates of USD 16.1 billion.
Over the full financial year (2021), the company’s full net profit rose 2.7 percent to USD 5.7 billion, with sales rising almost 4 percent to USD 57.3 billion.
Driven by the cloud
“We increased revenue in the fourth quarter with hybrid cloud adoption driving growth in software and consulting,” said IBM’s chairman and chief executive Arvind Krishna. “Our fourth-quarter results give us confidence in our ability to deliver our objectives of sustained mid-single-digit revenue growth and strong free cash flow in 2022,” Krishna said he expected free cash flow to rest between USD 10 billion and USD 10.5 billion in 2022.
The results represent IBM’s best since 2011.
Ups and downs
The leading contributors to the growth included the company’s software business and its consulting arm. The infrastructure division reported a 0.2% downturn in sales and the global financing operation was down 29.4% annually.
“In 2021, we continued to invest for the future by increasing R&D spending, expanding our ecosystem, and acquiring 15 companies to strengthen our hybrid cloud and AI [artificial intelligence] capabilities,” said IBM’s senior vice president and chief financial officer, James Kavanaugh.
Focus on the cloud
In order to bolster its cloud and hybrid offerings, IBM purchased SXiQ, a digital transformation services company specializing in cloud applications, cloud platforms, and cloud cyber security. The company has also announced plans to acquire the Adobe Workfront consulting unit and assets from Rego Consulting to strengthen its hybrid cloud and AI strategy.
IBM also separated its slower-growth business division, Kyndryl, so it could focus more on the increase in demand for cloud services and better compete with Amazon and Microsoft.
Furthermore, IBM’s Mohamed El-Shanawany explained the future of the hybrid cloud and its role in driving innovation.
