ALBAWABA — IBM on Wednesday announced it expected to cut about 3,900 jobs, or 1.5 percent of its global workforce, related to the spinoff and sale of two of its business units after reporting mixed earnings, with revenue coming in slightly higher than expected but operating profit and free cash flow lower than projected.
"Clients in all geographies increasingly embraced our hybrid cloud and AI solutions as technology remains a differentiating force in today's business environment," Arvind Krishna, IBM chief executive officer, said in an earnings release.
The New York-based technology firm reported profits of $2.9 billion in the final three months of last year, some 17 percent higher than the same period in 2021 despite revenue remaining flat at $16.7 billion.
IBM’s software segment grew nearly 3 percent, to $7.29 billion, above the $7.12 billion consensus among analysts polled by StreetAccount.
The company reported consulting revenue grew by 5 percent, to $4.77 billion, slightly lower than the $4.8 billion StreetAccount consensus, while its infrastructure segment generated $4.48 billion, up almost 2 percent, achieving more than the $4.18 billion consensus.
Jim Kavanaugh, IBM’s finance chief officer, said on a conference call that it would be prudent to expect mid-single-digit revenue growth for 2023 and around $10.5 billion in free cash flow.
IBM will take a one-time $300 million charge in its first quarter this year, to offset the cost of spinning off Kyndryl, an IT infrastructure services business that was officially separated from IBM in November, and IBM’s healthcare analytics business, which an investment firm is in the process of acquiring.
IBM shares dropped 0.52 percent, closing at 140.76, while it dropped a further 1.74 percent in premarket trading in New York.
