Shares of IBM were down sharply in midday trading after the company reported mixed earnings results Tuesday.

The company’s revenue was down almost 5% year-over-year, with every business segment down or flat, but the company said that cloud revenue growth accelerated in the quarter and was up 10% over the last 12 months at $19.5 billion.

IBM reported earnings of $2.25 per share, compared with $2.22 per share expected by analysts, according to Refinitiv. The company reported revenue of $18.18 billion, compared with $18.46 billion expected by analysts, according to Refinitiv.

The company said it returned $2.3 billion to shareholders.

“In the first quarter, our cloud revenue growth accelerated, and we again grew in key, high-value areas in cloud and cognitive software and in consulting,” chairman and CEO Ginni Rometty said in a statement. “IBM’s investments in innovative technologies coupled with our industry expertise and our commitment to trust and security position us well to help clients move to chapter two of their digital reinvention.”

IBM reiterated its guidance of at least $13.90 in earnings per share for 2019. Analysts surveyed by Refinitive expected $13.91 in earnings per share for the year.

The company’s stock is up almost 28% since the beginning of the year.

In October, IBM announced it was acquiring open-source software and technology distributor Red Hat in a deal valued at about $34 billion.

That deal, after which Red Hat would become a unit of IBM’s Hybrid Cloud division, is expected to close in the second half of the year.

“IBM is winning new, even cloud-native, customers before Red Hat,” analysts at Nomura Instinet wrote in a note to clients on April 9. “OpenShift [a Red Hat product] should help IBM win new customers and new workloads as enterprises begin to usher mission-critical applications from on-premise to public or private clouds.”


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