IBM's revenue and market capitalization
DEHOUI Lionel
The IBM Group is a major player in the US IT industry. It is one of the world's market leaders. The company is active in the hardware, software and IT services sectors. For the whole of 2020, its business declined. However, the company has recovered in the first three quarters of fiscal year 2021.
Photo credits: Open Grid Scheduler / Grid Engine
Q4 and full year 2020 business review
In Q4 2020, the cloud services business grew by 10% to an estimated $7.5 billion in revenue. It accounted for just over a third of the company's revenue. In the last three months of fiscal 2020, the company's revenue was $20.5 billion, down 6%.
For the full twelve months of this year, the US IT giant had total revenues of $73.6 billion. This was down 5% year-on-year. In detail, cloud revenues reached 25.1 billion dollars over the year, up 19%. For its part, Red Hat's turnover rose by 18% in 2020.
Between October and December, the group posted a net profit of $1.36 billion, down 63% on the same period last year. For the year 2020, IBM's net profit was $5.59 billion, compared to $9.4 billion in 2019. It was down 40% year-on-year. Excluding exceptional items, the group's earnings per share came to 2.07 dollars in Q4-2020.
The market was targeting $1.79. For the twelve months of this financial year, it was $8.67. This result also exceeded the market's expectations. The market expected earnings per share of USD 8.47 for the year.
Return to growth in the first quarter of 2021
In the first quarter of 2021, the IBM Group saw its business grow slightly. For the period as a whole, its revenue was $17.7 billion, up 1% year-on-year. After a year of falling quarterly revenues, this is a good performance that gives the company a glimmer of hope for the rest of the year.
The group also did better than the market's expectations. The latter was expecting a turnover of 17.3 billion dollars for this quarter. In detail, the Cloud & Cognitive Software business generated estimated revenues of $5.4 billion in Q1-2021, an increase of 3.8%.
The Global Business Services business had revenues of $4.2 billion, up 2.4%. The Global Technology Services division posted sales of USD 6.4 billion, down 1.5%. The Systems division generated sales of $1.4 billion, up 4.3%.
Finally, the Global Financing business saw its sales fall by 20% over the quarter to USD 240 million. In addition, for the first three months of 2021, IBM posted net income of $1.0 billion. This was down 19% year-on-year.
Second quarter 2021 results
IBM Group reported better-than-expected results for the second quarter of 2021. This resulted in two consecutive quarters of growth. This has not happened for three years. In fact, between April and June, the company achieved sales of $18.75 billion, up 3.4% compared to Q2-2020.
It also slightly exceeded market expectations. The market was expecting $18.29 billion for the quarter. For Q2-2021, the US IT giant reported net income of $1.32 billion, down 3% year-on-year.
Excluding exceptional items, earnings per share were $2.33. The market was looking for a value of 2.29 dollars. The strong performance in the quarter was mainly driven by strong growth in the cloud business.
Cloud revenues amounted to $7 billion in the second quarter of 2021. This represents a 13% year-on-year increase.
Group business review for the third quarter of 2021
In the third quarter of 2021, IBM Group reported disappointing results. They came in below expectations. For the period as a whole, its turnover reached 17.62 billion dollars, up by 0.3%. This means that it was virtually unchanged from the same time last year.
However, this turnover is below market estimates. The market was expecting 17.77 billion dollars. On the other hand, this quarter was marked by a good dynamic in Red Hat's business, which recorded a 17% growth in revenues. This helped save the results of the Cloud & Cognitive Software Business division, of which it is a part.
In the end, this division generated revenues of $5.69 billion in Q3-2021, an increase of 3%. In addition, between July and September 2021, IBM posted a net profit of $1.1 billion, compared to $1.7 billion a year earlier.
About IBM's dividend and market capitalisation
For several years, IBM Group has consistently paid a dividend to the company's shareholders. At the computer giant, this coupon is usually detached 4 times in a year. Here is the detachment in 2020.
- 9 November 2020: $1.558 per share
- 7 August 2020: $1.558 per share
- 7 May 2020: $1.558 per share
- February 7, 2020: $1.549 per share.
In addition, IBM has a strong presence in the financial markets. The company is listed on the New York Stock Exchange. As of November 2021, it has an estimated market capitalisation of over USD 100 billion.
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