The following is an excerpt from Alex Konrad | January 19, 2017 | Forbes.com |
Though IBM notched a major earnings beat to close out Q4 of 2016, a temporary jolt in after-hours trading quickly gave way to a major decline in share price.
The company reported non-GAAP earnings per share of $5.01 compared to analyst consensus of $4.88. Revenue for the quarter came in at $21.77 billion, up from expectations of $21.66 billion. Because of the strong quarterly earnings, IBM also beat full-year estimates, posting $13.59 in earnings per share.
IBM's stock was on the move in after hours trading, up more than $4 or about 2.4% in the minutes after reporting. But by 4:30 pm ET, sellers had their say, with the stock down about the same amount at $4.08, or 2.45%, as of 4:45 pm ET.
In a statement about the earnings, chairman and CEO Ginni Rometty claimed that the results of the past year established IBM as "the industry's leading cognitive solutions and cloud platform company." She credited IBM Watson and IBM Blockchain as two areas for growth. "More and more clients are choosing the IBM Cloud because of its differentiated capabilities, which are helping to transform industries, such as financial services, airlines and retail," Rometty added.
In the group of businesses centered around cloud, mobile and analytics that IBM calls its "strategic imperatives," Big Blue increased revenue by 13% to $32.8 billion. Cloud revenue itself grew 35% to $13.7 billion.
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