Global tech giant IBM (IBM 0.62%) announced its Q1 2024 results on April 24. Earnings exceeded analysts' expectations, but revenue fell slightly short of the mark.
The company reported diluted earnings per share (EPS) from continuing operations of $1.69, above the consensus estimate of $1.60, and marking a 66% increase from the prior year. However, revenue totaled $14.462 billion, below analysts' forecast of $14.527 billion and reflecting a 1.5% year-over-year increase. Here's a rundown of the results:
| Metric | Q1 2024 Result | Analyst Estimate | Q1 2023 Result | YoY Change |
|---|---|---|---|---|
| Revenue (in billions) | $14.462 | $14.527 | $14.252 | 1.5% |
| Diluted EPS | $1.69 | $1.60 | $1.02 | 66% |
| Net income (in billions) | $1.6 | N/A | $0.9 | 69% |
| Software segment revenue (in billions) | $5.899 | N/A | $5.591 | 5.5% |
IBM's business and recent focus
IBM operates at the intersection of technology and consulting, assisting businesses in navigating digital transformation. It offers hybrid cloud and artificial intelligence (AI) capabilities.
The company's strategic acquisitions, including its recently announced purchase of HashiCorp, aim to bolster these key areas. Recent efforts have focused on enhancing its software and cloud offerings, evidenced by the solid performance in these segments.
Quarterly highlights
This quarter, IBM's strategic focus on hybrid cloud and AI technologies continued to yield positive results, with its software segment seeing good growth. Continued demand for consulting services speaks to IBM's market position in this area. A slight downturn in the infrastructure segment bears watching.
Still, IBM's overall financial health remains strong, and its ongoing investment in future technologies like AI and quantum computing showcases its commitment to these areas. The strategic acquisition of HashiCorp underscores IBM's intent to enhance its hybrid cloud capabilities further.
Looking ahead
IBM is maintaining a positive outlook for 2024, including expectations of mid-single digit revenue growth and around $12 billion in free cash flow. The company expects that its emphasis on hybrid cloud and AI technologies will continue driving growth.
Investors should watch for IBM's progress in integrating HashiCorp and further expanding its cloud and AI capabilities. The company's ability to adapt to technological trends and market dynamics will be critical in sustaining its growth momentum.
