The American multinational International Business Machines (IBM) registered a net profit of 1,583 million dollars (1,408 million euros) between April and June, which represents an increase of 13.7% compared to the result of the same period the previous year. This was reported by the company this Thursday, in the presentation of its results. The company’s turnover in the second quarter reached 15,475 million dollars (13,768 million euros), 0.4% below the revenue recorded a year earlier. Given the results, IBM’s vice president and chief financial officer, James Kavanaugh, has announced that part of the profits will be invested in reinforcing its artificial intelligence strategy with “seven new acquisitions” that he has not detailed.
IBM’s turnover grew 7.2% in the software business, up to 6,608 million dollars (5,879 million euros), including an 11% increase in sales of Red Hat, while revenue from the consulting area totaled 5,013 million dollars (4,460 million euros), 4.2% more.
In contrast, revenue from the infrastructure business decreased by 14.6%, to 3,618 million dollars (3,219 million euros). In this way, in the first six months of 2023 the multinational obtained a net profit of 2,511 million dollars (2,234 million euros), 18.2% more than in the first half of the previous year, while revenues remained stable at 29,727 million dollars (26,447 million euros).
IBM was one of the last technology multinationals to join the great wave of layoffs that occurred in the sector. In January of this year, and after presenting results in 2022, with an increase in revenue of 5.5% and a drop in profits of 71%, due to an extraordinary charge for pensions, the multinational announced that it would lay off 1.5% of its workforce. The measure affected 3,900 jobs
“We continue to respond to the needs of our clients for trusted enterprise AI solutions and are particularly excited about the response to the recently launched Watsonx artificial intelligence platform,” said Arvind Krishna, IBM Chairman and CEO.
In this sense, Kavanaugh, pointed out that IBM has taken advantage of its solid cash position to invest in growth, announcing seven acquisitions to reinforce its hybrid cloud and artificial intelligence strategy. In fact, in 2022 its hybrid cloud revenue reached $22.4 billion, up 11%.
For the full year 2023, the company continues to expect revenue growth of 3% to 5%. On the other hand, it has estimated that at the end of this year it will obtain a free cash flow of around 10,500 million dollars (9,341 million euros), almost a thousand more than in the previous year.
Finally, while waiting to see how the Stock Markets react to its results, in the second quarter its earnings per share stood at 2.18 dollars, 0.16 more than expected and improved expectations in this section of the year. Its shares closed yesterday at $135.48, representing a rise of 7.7% in the last three months and 4.8% in the last 12.
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