Cloud Stocks: IBM’s Transition To A Hybrid Cloud And AI Company

The current pandemic has accelerated the need of all organizations to implement their digital transformation strategies. IBM (NYSE: IBM) is benefitting from this accelerated pace of transition. The company recently reported its first-quarter results that surpassed market expectations.

IBM’s Financials

Revenues for the first quarter fell 2% $17.7 billion, ahead of the Street’s estimates of $17.35 billion. Adjusted earnings of $1.77 a share were also ahead of the $1.63 that the market predicted.

By segment, revenues from Cloud & Cognitive Software that includes Cloud & Data Platforms such as Red Hat, Cognitive Applications, and Transaction Processing Platforms grew 0.8%to $5.4 billion. Within the segment, Cloud & Data Platforms grew 2% driven by Red Hat.

Revenues from Global Business Services (GBS) that includes Consulting, Application Management and Global Process Services grew 2.4% to $4.2 billion. Revenues from Global Technology Services (GTS) that includes Infrastructure & Cloud Services and Technology Support Services fell 15.3% to $6.4 billion. Revenues from its Systems segment that includes Systems Hardware and Operating Systems Software grew 2.2% to $1.4 billion and Global Financing revenues fell 21.9% to $240 million.

IBM did not provide any outlook for the second quarter of the year.

IBM’s Acquisitions

Recently, IBM announced the acquisition of Italy-based myInvenio. Founded in 2013 by Massimiliano Delsante, myInvenio provides process mining capabilities that make the optimization of complex core business processes easier. It automatically discovers end-to-end processes for fast and intuitive visualization and constantly monitors compliance and performance from enterprise data. Its solutions help reveal inefficiencies and bottlenecks within processes and help identify tasks that can benefit from automation. It also helps run simulations to identify automation opportunities so that organizations can conduct cost benefit analysis of applying automation capabilities.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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