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IBM’s rebound continues with faster growth in Q1 –

There was so much years of thin IBM when the company posted it 22 straight quarters revenue decline, the most severe period in the series 2012 to 2017. Even in the following years, significant growth is difficult to achieve. But in the second quarter straight, Big Blue began to change the story, mounting revenue growth of 8% over the previous quarter.

That growth rate was even stronger than the IBM recorded in Q4 2021, up 6.5%, a result TechCrunch described as encouraging. (IBM also grew in Q3 2021, but only 0.3%, which has not changed significantly.)

IBM shares, up more than 2% yesterday during normal trading, rose again this morning, adding more than 2% again ahead of the market. It was 7 points trading in the morning as we published this post.

In the Red Hat, IBM bought in 2018 $ 34 billion, led to revenue growth of 18% in the first quarter compared to the results of a year ago. When the big tech company bought the Red Hat, the idea was to bring in a respected brand of modern technology, which would allow it to continue to function as an independent entity while taking advantage of the growth machine. It seems to be working as planned, with the Red Hat working hard.

The goal of purchasing the Red Hat was to allow IBM to work as a consultant, rather than attempting to compete directly with Amazon, Google, and Microsoft in the public infrastructure business. The idea is to become a company that helps customers keep up with everything about the past and present cloud services, perhaps not an original idea, but one that seems to pay off.

Considering that IBM’s integrated consulting business also grew 24% in the first quarter, even more growth than the Red Hat hit, indicating that it could sell software and accompanying services. has been an IBM trademark for years. including the long-term decline. Now the new strategy presented by CEO Arvind Krishna seems to be working for him.

But can the company continue at this moderate pace, allowing it to efficiently – if not exclusively – grow the following components?

The future looks bright

Inside her income report, IBM said it expects “steady cash flow growth at the top end of the single-digit variance.” How does that compare to the expectations of investors? Yahoo Finance points out The average analyst forecast is expected to generate $ 60.69 billion in revenue this year, or 5.8% more than the $ 57.35 billion it generated in 2021.

In light of the simplicity, IBM predicts growth appears to be greater than what the path expects.

Overall, IBM’s combined business grew 17% while producing nearly $ 5 billion a quarter, but that was not good news. For example, the company’s infrastructure revenues came in at $ 3.2 billion (including the sale of Kyndryl, an infrastructure consulting business launched in late 2021). IBM also said it had withstood nominal losses from Russian trade after its invasion of Ukraine, and said it was feeling the effects of rising trade costs, especially in light of the value of human talent.

Patrick Moorhead, founder and chief analyst at Moor Insight & Strategies, sees further growth, especially the new Z16 as a further area that could push the company’s growth into the next segment.

“I think IBM may still be doing well in the clouds, but it was a good quarter. I expect it to be very strong in the next two quarters when the z16 platform demand comes in,” Moorhead told TechCrunch.