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IBM (IBM) recently announced its first-quarter results that continued to outpace market expectations. The company remains focused on growing through acquisitions, as it added another private player to its portfolio. IBM’s performance had been declining for a while, but it appears to have made a rebound, with the company delivering three straight quarters of positive growth.
 

IBM’s Financials

Revenues for the first quarter fell 20% to $14.2 billion, ahead of the Street’s estimates of $13.85 billion. Adjusted earnings of $1.40 a share were ahead of the $1.34 that the market predicted.

By segment, revenues from Software, which includes Hybrid Platform & Solutions and Transaction Processing, grew 15.4% to $5.8 billion. Revenue from Consulting, including Business Transformation, Technology Consulting, and Application Operations, grew 17.4% to $4.8 billion. Revenue from Infrastructure, including Hybrid Infrastructure and Infrastructure Support, grew 0.3% to $3.2 billion.

IBM did not provide any outlook for the second quarter. It did, however, mention that it expected constant currency revenue growth at the high end of the mid-single digit range.
 

IBM’s Acquisitions

Recently, IBM announced its acquisition of Irvine-based Neudesic, a cloud services consultancy specializing in the Microsoft Azure platform, for an undisclosed sum. The acquisition is part of IBM’s continued effort to invest in its hybrid cloud and AI strategy, and to expand its cloud services technology, skills, and capabilities to meet the growing demand of clients’ hybrid cloud needs.

Neudesic has over 1,500 cloud and data experts located across the US and India. It provides digital transformation services across advisory, application development, cloud migration, DevOps, integration, data engineering, data visualization, and hyper-automation services.

It is a leading global solution partner for Microsoft (MSFT) and has deep expertise in technology transformation and delivering Microsoft Azure cloud services to clients across the health and life sciences, financial services, energy and utilities, professional services, and retail industries.

The acquisition expands IBM’s portfolio of hybrid multi-cloud services and further advances the company’s hybrid cloud and AI strategy. It also enhances IBM’s ability to help clients with meeting their business needs through the use of multi-cloud technologies. IBM Consulting’s skills and certifications for Microsoft, AWS, Google Cloud Platform, and many more will also be extended as a result of the acquisition.

IBM also expanded its financial services offerings by entering into strategic tie-ups with HSBC (HSBC) and Discover Financial Services (DFS). The partnership with HSBC will allow them to explore applications for quantum computing in financial services. The three-year partnership will help support HSBC’s expertise in quantum computing and ensure its organizational readiness to take advantage of the technology.

IBM’s partnership with Discover will allow Discover to enhance its digital transformation of applications and existing systems to a hybrid cloud architecture using Red Hat OpenShift.

IBM’s stock is currently trading at around $139.13 with a market capitalization of $125.8 billion. It touched a 52-week high of $146.12 in June last year and a 52-week low of $114.56 in November.