The IBM Group is the biggest company in the US IT business. It is a market leader around the world. The business is involved in hardware, software, and IT services. Its business went down all through 2020. But the company made a comeback in the first three quarters of the fiscal year 2021. 78% of CFD accounts with retail traders lose money. It would help to consider whether you can afford to lose a lot of money. This is an ad for eToro’s CFD trading.
IBM
The IBD Stock Checkup Tool provides that IBM’s IBD Composite Rating is a healthy 85 out of a maximum of 99. Based on the CAN SLIM investment model, look for stocks with a Core sandwich Rating of 90 or higher if you want to make the most money.
The stock’s Relative Strength Rating of 92 is also good. The rating means that over the past year, IBM stock has done better than 92% of all stocks in the IBD database. When they start to go up in price, the best stocks often have a rating of over 80.
But after the earnings report, the company’s relative power line fell after racing to new highs. The relative power line shows how a stock is doing about the S&P 500. When the line goes up, it resources that it has done better than the benchmark index.
Business review for Q4 and all of 2020
In the fourth quarter of 2020, the cloud services business grew by 10%, bringing in about $7.5 billion. It brought in just over a third of the funds the company made. In the last 3 months of the fiscal year 2020, the company made $20.5 billion, which is 6% less than the previous year.
This year, the US IT giant made a total of $73.6 billion in sales for the whole year. This was 5% less than it was a year ago. In more detail, cloud sales reached $25.1 billion over the year, which is a 19% increase from the previous year. As for Red Hat, its sales went up by 18% in 2020.
The group made a net profit of $1.36 billion from October to December, which is 63% less than last year’s. IBM made $5.59 billion in net profit in 2020, compared to $9.4 billion in 2019. It was 40% less than the year before.
If you take out one-time events, the group’s per-share earnings in Q4-2020 were $2.07. The goal of the market was $1.79. In this fiscal year, it was $8.67 for the whole year. The market was also surprised by this result. The market thought the company would earn USD 8.47 per share for the year.
Return to expansion in the first three months of 2021
The IBM Group’s business grew slightly in the first three months of 2021. Overall, it made $17.7 billion, which is 1% more than the same time last year. After a year of quarterly sales going down, this is a good result that gives the company hope for the rest of the year. Also, the group did better than what the market expected.
The second company thought it would make 17.3 billion dollars this quarter. In more detail, the Cloud & Cognitive Software business made an estimated $5.4 billion in revenue in Q1 of 2019, which is a 3.8% increase from Q1 of 2018. The Global Business Services business made $4.2 billion in sales, which is 2.4% more than last year.
The sales for the Global Technology Services division went down by 1.5% to USD 6.4 billion. The Systems division made $1.4 billion in sales, which is 4.3% more than last year. Lastly, sales in the Global Financing business dropped by 20% over the quarter to USD 240 million. Also, IBM had a net income of $1 billion for the first three months of 2021. This was 19% less than it was a year ago.
Second-quarter results for 2021
For the second quarter of 2021, IBM Group said its results were better than expected. This led to growth for two quarters in a row. It has been three years since this last happened. The company made $18.75 billion in sales from April to June, which is 3.4% more than in Q2-2020.
It also did a little better than what the market expected. The market had thought that the quarter would bring in $18.29 billion. The US IT giant reported a net income of $1.32 billion for Q2-2021, which was 3% less than last year. If you take out unusual things, the earnings per share were $2.33.
The value that the market was looking for was $2.29. Most of the quarter’s good results came from the cloud business, which grew quickly. In the second quarter of 2021, cloud sales brought in $7 billion. This is a 13% increase from last year.
Group business update for the third quarter of 2021
IBM Group’s results for the third quarter of 2021 were not good. They didn’t live up to our hopes. Overall, its sales increased by 0.3% to reach 17.62 billion dollars. This means that it was almost the same as it was at this time last year. But this turnover is less than what the market would expect.
The market thought it would be worth 17,77 billion dollars. On the other hand, Red Hat’s business grew by 17% this quarter, which shows that things are going well. This saved the results of the division it is a part of, Cloud & Cognitive Software Business.
In the end, this division made $5.69 billion in sales in Q3-2021, which is a 3% increase from the previous quarter. Also, IBM made a net profit of $1.1 billion between July and September 2021, compared to $1.7 billion the year before.
About the dividend and market value of IBM
IBM Group has always given a dividend to its shareholders for several years. This coupon is generally taken off at the computer giant four times a year. Here is the separation in 2020.
- $1.558 per share on November 9, 2020
- $1.558 per share on August 7, 2020
- $1.558 per share on May 7, 2020
- $1.549 per share on February 7, 2020.
The financial markets are also a big part of IBM’s business. The Stock Exchange of New York is where the company is listed. As of Nov 2021, it is expected to be worth more than USD 100 billion on the market.
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