Check out the latest IBM earnings call transcript.

What happened

Shares of International Business Machines (NYSE:IBM) rose as much as 10.2% higher on Wednesday morning before backing down to a milder 7.3% gain as of 1:30 p.m. EST. Big Blue's fourth-quarter earnings report inspired the largest single-day gain its stock has seen in years.

So what

In the fourth quarter, IBM's sales fell 3.1% below the year-ago period's result, landing at $21.8 billion. This metric was in line with the consensus analyst projection. On the bottom line, the technology giant edged out Wall Street's $4.84 target by reporting adjusted earnings of $4.87 per share. More importantly, management's profit and cash flow guidance for fiscal year 2019 exceeded the current analyst view.

IBM's CEO, Ginni Rometty, smiling with arms akimbo in a purple dress.

IBM's CEO, Ginni Rometty, likes what she sees in the company's future. Image source: IBM.

Now what

"In 2018 we repositioned our business model and delivered revenue, operating profit and EPS growth along with strong free cash flow realization," CFO James Kavanaugh said in a prepared statement.

In other words, IBM's long and arduous journey back to healthy growth is turning an important corner right here. The stock is still trading 19% lower over the last 52 weeks and 28% lower in a five-year perspective. Assuming that IBM can follow up this successful report with steady growth throughout 2019 and then close the pending acquisition of open-source software specialist Red Hat (NYSE:RHT), this could be a prosperous year for Big Blue and its investors.