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IBM spikes after posting its first annual revenue growth since 2011
- IBM beat on both the top and bottom lines and posted its first annual revenue growth since 2011.
- Shares spiked more than 8% following the report.
- RBC Capital Markets analysts raised their price target.
- Watch IBM trade live.
IBM was up more than 8% Wednesday to more than $133 a share, and on track to open at their best level in three months, after the company reported better than expected top- and bottom-line results and its first annual revenue growth since 2011.
The computer-solutions provider earned an adjusted $4.87 a share in the fourth quarter on revenue of $21.76 billion, beating the $4.84 and $21.75 billion that analysts surveyed by Bloomberg were expecting. On a full-year basis, IBM saw revenue edge up 1% to $79.86 billion, making for the first annual growth since 2011.
"In 2018 we returned to full-year revenue growth, reflecting growing demand for our services and leadership solutions in hybrid cloud, AI, analytics and security," Ginni Rometty, IBM chairman, president and chief executive officer said in the release. "Major clients worldwide, such as BNP Paribas, are turning to the IBM Cloud and our unmatched industry expertise to transform their businesses and drive innovation."
Tuesday's results caused analysts at RBC Capital Markets to raise their price target for the stock while maintaining an "outperform" rating.
"Given ongoing macro volatility, this was an impressive print with gross-margins improving (y/y) for the 1st time in 3+ years," RBC analysts Amit Daryanani and Amitesh Bajad said.
"We think organically the improvement in services should be sustainable specially in H1:19 where the bar is relatively benign, maintain OP and adjusting our target to $160 (prior $155).
IBM shares were up almost 8% this year through Tuesday's closing bell. They lost 26% last year.
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