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IBM plans to cut 3,900 jobs after beating estimates with $16.7 billion in 2022 Q4 revenue

via:IT之家     time:2023/1/26 8:00:39     readed:51

IBM reported 2022 Q4 adjusted earnings of $3.60 per share on $16.7 billion in revenue, both slightly better than consensus. Analysts on average had expected IBM to earn $3.59 a share on revenue of $16.15 billion.

For the full year 2022, IMB posted adjusted earnings per share of $7.93 on revenue of $60.53 billion, up more than 6 percent from 2021 and the biggest annual increase since 2011.

IBM said Wednesday it will cut 3,900 jobs, or about 1.5 percent of its workforce, as part of a partial divestiture. And revenues were flat in the fourth quarter because of weak demand for its consulting services. IBM shares fell nearly 2.5% after hours on the news.

IBM spun off its massive and outdated hosting infrastructure business, now called Kyndryl, in late 2021 to focus on its hybrid cloud, which helps customers build their own portfolio of data centers and leased computing resources, IT Home has learned. It also spun off its healthcare data and analytics business from its AI business, Watson Health.

IBM said the resulting job cuts would result in a $300m charge between January and March. But James Kavanaugh, the company's chief financial officer, said IBM would continue to hire in key areas.

IBM's free cash flow is expected to reach $10.5 billion in fiscal 2023. The company also forecast annual revenue growth in the mid-single digits on a constant currency basis, down from 12 percent reported last year, as the demand for digital business caused by the pandemic has given way to more cautious spending by customers in the face of increased recession fears.

IBM said in October that new orders in Western Europe were weak, and analysts lowered their forecasts.

Kavanaugh said the firm's consulting business is growing in terms of cloud spending. Its deals to build services with partners like Amazon AWS and Microsoft Azure doubled in 2022.

IBM's hybrid cloud revenue rose 2 percent to $6.3 billion in the quarter ended Dec. 31. In 2022, IBM's hybrid cloud revenue was $22.4 billion, up 11% from the previous year.

BM software division revenue rose 2.8% year-over-year to $7.29 billion in the fourth quarter; Revenue in the infrastructure segment rose 1.6 percent to $4.48 billion in the fourth quarter from a year earlier. Fourth-quarter revenue from IBM's consulting business rose 0.5 percent from a year earlier to $4.77 billion. At Red Hat, which was acquired by IBM, revenue rose 10 per cent year on year, slowing from 20 per cent growth previously.

The 110-year-old company, which generates more than half of its revenue outside the United States, said it expected foreign exchange effects to be neutral to its business this year as the dollar weakens. It recorded foreign exchange losses of more than $1 billion in the fourth quarter.

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