IBM Q4 results exceed expectations – the stock is rising in the after-hours

International Business Machines Corporation (NYSE: IBM) announced Q4 2023 financial results after the closing bell in the US on Wednesday.

The American IT and consulting company reported revenue of $17.381 billion for the last quarter of 2023 (up by 4% year-over-year), narrowly beating Wall Street estimate of $17.289 billion.

Earnings per share (EPS) reported at $3.87 per share vs. $3.794 per share expected. EPS was up by 8% year-over-year.

Company overview

• Founded: 1991
• Headquarters: 1 Orchard Road, Armonk, New York, United States
• Number of employees: 288,300 (2022)
• Industry: Information technology
• Key people: Arvind Krishna (Chairman & CEO), Gary Cohn (Vice Chairman), James Kavanaugh (Senior Vice President & CFO)

CEO and CFO commentary

”In the fourth quarter, we grew revenue in all of our segments, driven by continued adoption of our hybrid cloud and AI offerings. Client demand for AI is accelerating and our book of business for watsonx and generative AI roughly doubled from the third to the fourth quarter,” said Arvind Krishna, CEO of IBM said in press release.

“For the year, revenue growth was in line with our expectations, and we exceeded our free cash flow objective. Based on the strength of our portfolio and demonstrated track record of innovation, for 2024 we expect revenue performance in line with our mid-single digit model and about $12 billion in free cash flow,” Krishna looked at the year ahead.

James Kavanaugh, CFO of the company, also reflected on the company’s performance during the last quarter of 2023: ”We again demonstrated the fundamental strengths of our business in the fourth quarter through solid, broad-based revenue growth, continued profit margin expansion, increased productivity gains and strong cash generation.”

”Throughout 2023, those strengths enabled us to increase our investment in R&D and talent, and complete nine acquisitions to bolster our hybrid cloud and AI capabilities, all while continuing to return value to shareholders through our dividend,” Kavanaugh added.

Stock reaction

IBM shares were flat at the end of Wednesday at $173.93 as investors were awaiting the latest results.

Shares rose by around 5% in the after-hours trading. All eyes will be on the stock at the open on Thursday.

Stock performance

• 5 day: +4.73%
• 1 month: +6.41%
• 3 months: +26.88%
• Year-to-date: +6.35%
• 1 year: +23.56%

International Business Machines Corporation stock price targets

• Stifel Nicolaus: $183
• Evercore ISI: $200
• Jefferies Financial Group: $180
• Societe Generale: $143
• Bank of America: $170
• Wedbush: $140
• BMO Capital Markets: $155
• Royal Bank of Canada: $179
• Morgan Stanley: $130
• JP Morgan Chase & Co.: $145
• Credit Suisse Group: $162
• Citigroup: $145
• Moffett Nathanson: $140

International Business Machines Corporation is the 75th largest company in the world with a market cap of $158.81 billion, according to CompaniesMarketCap.

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Sources: International Business Machines Corporation, TradingView, MarketWatch, MarketBeat, CompaniesMarketCap