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Abu Dhabi, UAEMonday 24 September 2018

IBM slips into the black but revenues beat forecasts

Firm posts $1.05 billion quarterly loss reflecting a $5.5bn charge associated with tax legislation, against a $4.5bn profit insame period last year

Pedestrians pass a video advertisement for IBM in Massachusetts. Brian Snyder/Reuters
Pedestrians pass a video advertisement for IBM in Massachusetts. Brian Snyder/Reuters

IBM reported its first quarter of revenue growth in more than five years as the company ramps up its cloud computing business and looks for new opportunities from its investments in artificial intelligence.

"Over the past several years we have invested aggressively in technology and our people to reposition IBM," James Kavanaugh, IBM's new chief financial officer, said after the company reported its fourth-quarter earnings.

The company still reported a quarterly loss of US$1.05 billion, reflecting a $5.5bn charge associated with recent tax legislation. IBM reported a $4.5bn profit in the same period a year earlier.

The technology and consulting company posted revenue of $22.54bn in the period, which topped Wall Street forecasts. Six analysts surveyed by Zacks expected $21.96bn.

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For the year, the company reported profit of $5.75bn, or $6.14 per share, down from $11.87bn, or $12.38 a share, in 2016. Annual revenue for 2017 was $79.14bn.

On a per-share basis, the Armonk, New York-based company said it had a quarterly loss of $1.14. Adjusted for pretax expenses and non-recurring costs, IBM reported a quarterly profit of $5.18 per share.

The results beat Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for an adjusted profit of $5.17 per share.

IBM shares have risen 10 per cent since the beginning of the year, while the Standard & Poor's 500 index has increased about 5 per cent.

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