Latest news with #AIBookofBusiness
Yahoo
24-04-2025
- Business
- Yahoo
IBM Tanks 6.8%--But Its $6B AI Engine Might Be the Real Story
IBM (NYSE:IBM) just threw a curveball into the market narrative. After years of sidestepping quarterly forecasts, Big Blue decided its time to talk numbers. The company issued rare Q2 revenue guidance between $16.4 billion and $16.75 billiontopping Wall Street estimatesand doubled down on its 2025 target of at least 5% revenue growth. First-quarter earnings came in hot: $1.60 per share on $14.5 billion revenue, beating expectations. The kicker? Its not just legacy hardware or consulting. IBMs high-margin software unit did the heavy lifting this time, backed by the companys growing AI bets. But not everything was smooth sailing. IBM disclosed that 15 U.S. government contractsworth around $100 millionwere abruptly canceled under a federal cost-cutting push. That news sent the stock down 6.8% at 6.52am in the premarket trading today. While the financial hit is small (less than 1% of consulting backlog), the psychological blow landed hard. Investors, already jittery about macro volatility and shifting U.S. policies, were quick to react. Unlike peers more exposed to federal spending, IBM has the advantage of diversificationespecially into enterprise software and AI, which have been its safety net in stormy times. Heres where it gets interesting: IBMs AI Book of Business jumped by another $1 billion this quarter, pushing the total above $6 billion. Its a strong signal that the companys pivot to AI isnt just PRits translating into deals. For a company that once posted 20 straight quarters of revenue declines, this is a full-blown turnaround. IBMs evolution from old-school IT to modern-day AI powerhouse is starting to look realand increasingly investable. This article first appeared on GuruFocus. Sign in to access your portfolio
The Star
24-04-2025
- Business
- The Star
IBM says 15 contracts impacted by DOGE cost cuts, shares drop
FILE PHOTO: A view shows the IBM Australia building in Melbourne, Australia, March 24, 2025. REUTERS/Hollie Adams/File Photo (Reuters) -International Business Machines said 15 of its government contracts were shelved under a cost-cutting drive by the Trump administration, a setback that eclipsed its upbeat revenue forecast and dragged its shares down over 5% after hours. The federal consulting businesses of Big Blue's rivals such as Accenture have also taken a hit from belt-tightening efforts by the U.S. administration and its Department of Government Efficiency (DOGE). The impacted contracts amounted to about $100 million, which was less than 1% of the order backlog in IBM's consulting unit, finance chief James Kavanaugh told Reuters on Wednesday. Still, some analysts said the cancellations fanned uncertainty for the company at a time when U.S. tariffs cloud the global economic outlook. To bolster investor confidence, IBM broke from its long-standing practice of not issuing quarterly forecasts. It also reported better-than-expected first-quarter earnings and maintained its target of achieving at least 5% revenue growth on a constant currency basis in 2025. "We've chosen now, in light of the very unprecedented dynamic of uncertainty going on in the market, to give a second-quarter revenue guidance range," Kavanaugh said. "We felt incumbent upon ourselves to give as much transparency as possible to our investor group." IBM shares have gained 12% so far this year, outperforming the benchmark S&P 500 index, which has declined nearly 9%. The company forecast June-quarter revenue between $16.40 billion and $16.75 billion, above analysts' average estimate of $16.33 billion, according to data compiled by LSEG. In the first quarter, its revenue rose 1% to $14.5 billion. Consulting revenue fell 2% to $5.1 billion, roughly in line with estimates. Some investors may focus more on the contract cancellations, given the economic uncertainty, said Michael Ashley Schulman, chief investment officer at Running Point Capital. "In a world wobbling on policy pivots and macro murk, IBM's mostly good quarter may not be enough to assuage all the negative macro sentiment." Adjusted profit stood at $1.60 per share, compared with estimates of $1.40 per share, helped by growth in the high-margin software segment. IBM's AI Book of Business — a combination of bookings and actual sales across various products — stood at more than $6 billion inception-to-date, up about $1 billion from the previous quarter. (Reporting by Arsheeya Bajwa in Bengaluru and Juby Babu in Mexico City; Editing by Alan Barona and Devika Syamnath)
CNA
23-04-2025
- Business
- CNA
IBM says 15 contracts impacted by DOGE cost cuts, shares drop
International Business Machines said 15 of its government contracts were shelved under a cost-cutting drive by the Trump administration, a setback that eclipsed its upbeat revenue forecast and dragged its shares down over 5 per cent after hours. The federal consulting businesses of Big Blue's rivals such as Accenture have also taken a hit from belt-tightening efforts by the U.S. administration and its Department of Government Efficiency (DOGE). The impacted contracts amounted to about $100 million, which was less than 1 per cent of the order backlog in IBM's consulting unit, finance chief James Kavanaugh told Reuters on Wednesday. Still, some analysts said the cancellations fanned uncertainty for the company at a time when U.S. tariffs cloud the global economic outlook. To bolster investor confidence, IBM broke from its long-standing practice of not issuing quarterly forecasts. It also reported better-than-expected first-quarter earnings and maintained its target of achieving at least 5 per cent revenue growth on a constant currency basis in 2025. "We've chosen now, in light of the very unprecedented dynamic of uncertainty going on in the market, to give a second-quarter revenue guidance range," Kavanaugh said. "We felt incumbent upon ourselves to give as much transparency as possible to our investor group." IBM shares have gained 12 per cent so far this year, outperforming the benchmark S&P 500 index, which has declined nearly 9 per cent. The company forecast June-quarter revenue between $16.40 billion and $16.75 billion, above analysts' average estimate of $16.33 billion, according to data compiled by LSEG. In the first quarter, its revenue rose 1 per cent to $14.5 billion. Consulting revenue fell 2 per cent to $5.1 billion, roughly in line with estimates. Some investors may focus more on the contract cancellations, given the economic uncertainty, said Michael Ashley Schulman, chief investment officer at Running Point Capital. "In a world wobbling on policy pivots and macro murk, IBM's mostly good quarter may not be enough to assuage all the negative macro sentiment." Adjusted profit stood at $1.60 per share, compared with estimates of $1.40 per share, helped by growth in the high-margin software segment. IBM's AI Book of Business — a combination of bookings and actual sales across various products — stood at more than $6 billion inception-to-date, up about $1 billion from the previous quarter.
CNA
23-04-2025
- Business
- CNA
IBM forecasts second-quarter revenue above estimates, soothing tariff worries
IBM said on Wednesday it expects second-quarter revenue above Wall Street estimates, betting on resilient demand for its software services amid economic uncertainty brought on by U.S. President Donald Trump's tariffs. Shares of the company were up 3.9 per cent after the bell. The move marked a break from IBM's long-standing practice of not issuing quarterly forecasts and underscored the company's efforts to bolster investor confidence at a time when trade tensions have rattled global markets. A significant government contractor, IBM is also under pressure from the U.S. administration and its Department of Government Efficiency's cost-cutting drive, which has already weighed on businesses of companies such as Accenture. "We've chosen now, in light of the very unprecedented dynamic of uncertainty going on in the market, to give a second-quarter revenue guidance range," IBM Chief Financial Officer James Kavanaugh told Reuters in an interview. "We felt incumbent upon ourselves to give as much transparency as possible to our investor group." The company forecast June-quarter revenue between $16.40 billion and $16.75 billion, above analysts' average estimate of $16.33 billion, according to data compiled by LSEG. IBM also maintained its target of achieving at least a 5 per cent revenue growth on a constant currency basis in 2025. Kavanaugh said that Washington's efforts to cut back on federal spending had led to stop-work orders or cancellation of roughly 15 contracts. But the hit to IBM is likely to be small as the U.S. federal business is less than 5 per cent of IBM's annual revenue and within that federal unit, about 60 per cent is consulting, Kavanaugh said. Consulting revenue in the first quarter fell 2 per cent to $5.1 billion, roughly in line with estimates. Adjusted profit in the March quarter stood at $1.60 per share, compared to the average estimate of $1.40 per share, helped by growth in the high-margin software segment. IBM's AI Book of Business — a combination of bookings and actual sales across various products — stood at more than $6 billion inception to date, up about $1 billion from the previous quarter.
Yahoo
23-04-2025
- Business
- Yahoo
IBM forecasts second-quarter revenue above estimates, soothing tariff worries
By Arsheeya Bajwa (Reuters) -IBM said on Wednesday it expects second-quarter revenue above Wall Street estimates, betting on resilient demand for its software services amid economic uncertainty brought on by U.S. President Donald Trump's tariffs. Shares of the company were up 3.9% after the bell. The move marked a break from IBM's long-standing practice of not issuing quarterly forecasts and underscored the company's efforts to bolster investor confidence at a time when trade tensions have rattled global markets. A significant government contractor, IBM is also under pressure from the U.S. administration and its Department of Government Efficiency's cost-cutting drive, which has already weighed on businesses of companies such as Accenture. "We've chosen now, in light of the very unprecedented dynamic of uncertainty going on in the market, to give a second-quarter revenue guidance range," IBM Chief Financial Officer James Kavanaugh told Reuters in an interview. "We felt incumbent upon ourselves to give as much transparency as possible to our investor group." The company forecast June-quarter revenue between $16.40 billion and $16.75 billion, above analysts' average estimate of $16.33 billion, according to data compiled by LSEG. IBM also maintained its target of achieving at least a 5% revenue growth on a constant currency basis in 2025. Kavanaugh said that Washington's efforts to cut back on federal spending had led to stop-work orders or cancellation of roughly 15 contracts. But the hit to IBM is likely to be small as the U.S. federal business is less than 5% of IBM's annual revenue and within that federal unit, about 60% is consulting, Kavanaugh said. Consulting revenue in the first quarter fell 2% to $5.1 billion, roughly in line with estimates. Adjusted profit in the March quarter stood at $1.60 per share, compared to the average estimate of $1.40 per share, helped by growth in the high-margin software segment. IBM's AI Book of Business — a combination of bookings and actual sales across various products — stood at more than $6 billion inception to date, up about $1 billion from the previous quarter.
