Latest news with #JamesKavanaugh
Yahoo
23-07-2025
- Business
- Yahoo
IBM down on Q2 profit miss, but co upbeat on AI and cash outlook
-- IBM reported second-quarter earnings below Wall Street expectations on Tuesday, though revenue edged past expectations and the company raised its full-year cash flow guidance on the back of continued AI-driven fell 4.7% to $268.75 in after-hours trading. Earnings per share came in at $2.31, missing analysts' estimate of $2.65. Revenue rose to $17 billion, slightly above the consensus forecast of $16.59 billion. CEO Arvind Krishna said IBM (NYSE:IBM) 'exceeded expectations for free cash flow,' and pointed to growing demand for generative AI, with that segment's book of business now exceeding $7.5 billion. The company lifted its full-year free cash flow outlook to over $13.5 billion, citing a strong first-half performance and expanding James Kavanaugh said portfolio mix and productivity initiatives had supported 'double-digit profit growth.' Related articles IBM down on Q2 profit miss, but co upbeat on AI and cash outlook Victoria's Secret Exposed: The Warning Sign Behind the Stock's 52% Collapse After soaring 149%, this stock is back in our AI's favor - & already +25% in July
Yahoo
19-05-2025
- Business
- Yahoo
AI makes further inroads into the mainframe ecosystem
This story was originally published on CIO Dive. To receive daily news and insights, subscribe to our free daily CIO Dive newsletter. Generative AI is helping enterprises breathe new life into legacy infrastructure, as vendors deploy coding assistants and automation tools that target mainframe estates. Capgemini rolled out a code conversion toolkit designed to refactor COBOL applications and update aging databases, the IT consulting and services firm said in a Wednesday announcement. Rocket Software, which marked 35 years of enterprise IT support this year, unveiled a suite of modernization services, including mainframe anomaly detection automation and a plain-language coding assistant, on Tuesday. Large language model technologies have boosted application refactoring capabilities to the point where many companies are opting to re-engineer mainframe applications rather than migrating them to the cloud, according to ISG market research published in March. 'Service providers are using GenAI to open up new possibilities for clients,' John Schick, ISG consulting lead on mainframe computing, said in the report. 'The functions that mainframes have always performed are still essential to many enterprises, and GenAI provides new ways to maximize their value.' The mainframe ecosystem got an AI boost last month when IBM delivered the latest workhorse in its Z Systems lineage, the z17 mainframe. The newest member of IBM's mainframe family comes equipped with Telum II high-capacity AI processors and will reach general availability in June. IBM's previous Z Systems unit, the z16, had a historically successful run in terms of consistent revenue generation, IBM SVP and CFO James Kavanaugh said during a January earnings call. Coding tools built on LLM capabilities have already unlocked value across the financial sector and are poised to deliver more, Michael Abbott, Accenture senior managing director and global banking lead, told CIO Dive in January. Goldman Sachs, Bank of America and Citigroup tied tangible efficiency gains to coding tools powered by generative AI models. Generative AI-assisted coding is spreading across industries, according to a recent Publicis Sapient report. Executives are confident in the technology's modernization capacity, the digital consulting firm found in a recent survey of 600 IT and business leaders. Four in 5 respondents are eyeing coding assistants to help manage legacy estates, refactor aging applications and automate software testing processes. 'One of the attributes of AI that we like is explainability — the fact that mainframe operations can now be explained in simple English to non-mainframers,' Rocket Software CEO Milan Shetti, told CIO Dive. The software provider is also bullish on generative AI's potential as a training tool for future mainframe talent. Rocket is ramping up efforts to address enterprise mainframe skills gaps and prepare engineers for z17 deployments, the company said. 'One of the most pressing challenges facing enterprise IT teams today is the ability to address the IT skills gap while modernizing core systems and scaling operations,' said IDC Group VP Stephen Elliot in the Rocket announcement. 'AI is a powerful tool that allows IT to effectively align itself to the business by delivering greater insights and efficiency.' Capgemini's efforts center around easing the shift from mainframe to hybrid cloud infrastructure, the company said Wednesday. 'Many organizations have already explored various mainframe migration approaches like rehosting, but none of these lead to a mainframe exit option,' Franck Greverie, Capgemini chief portfolio and technology officer, said in the announcement. As generative AI models matures, the technology can create multiple modernization pathways, Lisa Dyer, SVP at IT services firm Ensono, said in an interview with CIO Dive. 'Clients running mission critical apps on mainframe are not necessarily known historically to be very experimental,' Dyer said. 'Generative AI opens up ways to try out various options safely.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
07-05-2025
- Business
- Yahoo
How Much Would It Take To Earn $100 A Month From IBM Stock
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. International Business Machines (NYSE:IBM) provides integrated solutions and services in the U.S. and internationally. The 52-week range of IBM stock price was $162.62 to $266.45. IBM's dividend yield is 2.80%. It paid $6.72 per share in dividends during the last 12 months. Don't Miss: 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.30/share with a $1000 minimum. Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — you can become an investor for $0.80 per share today. The Latest On IBM On April 23, the company announced its Q1 2025 earnings, posting EPS of $1.60, beating the analyst consensus estimate of $1.40, as reported by Benzinga. Quarterly revenue of $14.54 billion came in above the consensus estimate of $14.40 billion. "Revenue growth, once again led by Software, combined with our productivity initiatives, drove significant gross margin expansion and operating leverage in the quarter," said CFO James Kavanaugh. IBM sees second-quarter revenue in a range of $16.40 billion to $16.75 billion, compared to the consensus estimate of $16.33 billion. Check out this article by Benzinga for 14 analysts' insights on IBM. Trending: Donald Trump Just Announced a $500 Billion AI Infrastructure Deal — Here's How You Can Invest in the Entertainment Market's Next Big Disruptor for Just $998 How Can You Earn $100 Per Month As An IBM Investor? If you want to make $100 per month — $1,200 annually — from IBM dividends, your investment value needs to be approximately $42,857, which is around 179 shares at $239.66 each. Understanding the dividend yield calculations: When making an estimate, you need two key variables — the desired annual income ($1,200) and the dividend yield (2.80% in this case). So, $1,200 / 0.028 = $42,857 to generate an income of $100 per month. You can calculate the dividend yield by dividing the annual dividend payments by the current price of the stock. The dividend yield can change over time. This is the outcome of fluctuating stock prices and dividend payments on a rolling basis. 90/share. For instance, assume a stock that pays $2 as an annual dividend is priced at $50. Its dividend yield would be $2/$50 = 4%. If the stock price rises to $60, the dividend yield drops to 3.33% ($2/$60). A drop in stock price to $40 will have an inverse effect and increase the dividend yield to 5% ($2/$40).
Yahoo
24-04-2025
- Business
- Yahoo
International Business Machines Corp (IBM) Q1 2025 Earnings Call Highlights: Strong Software ...
Revenue: $14.5 billion, up 2% at constant currency. Adjusted EBITDA: $3.4 billion, with a 240 basis points margin expansion. Operating Pre-tax Income: $1.7 billion. Operating Earnings Per Share: $1.60. Free Cash Flow: $2 billion, the highest first quarter free cash flow in many years. Software Revenue Growth: Up 9%, with Red Hat up 13% and Automation up 15%. Annual Recurring Revenue (ARR) for Software: $21.7 billion, up 11% year-over-year. Consulting Revenue: Flat, with a mid-single digit backlog growth. Infrastructure Revenue: Declined 4%, with IBM Z down 14%. Debt Balance: Over $63 billion, including $10 billion for the financing business. Cash Position: $17.6 billion, up $2.8 billion from the end of 2024. Full Year Guidance: Maintaining revenue growth of 5%-plus and about $13.5 billion of free cash flow. Warning! GuruFocus has detected 3 Warning Sign with CCS. Release Date: April 23, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. International Business Machines Corp (NYSE:IBM) reported strong revenue growth, profitability, and cash flow generation, exceeding expectations for the first quarter of 2025. The company's Software segment grew by 9%, with notable strength in Red Hat, Automation, Data, and Transaction Processing. IBM's generative AI business saw significant traction, with a book of business now over $6 billion, up by $1 billion in the quarter. The upcoming launch of the z17 mainframe is expected to deliver enhanced AI capabilities and new security features, resonating well with clients. IBM's strategic acquisitions, such as HashiCorp, are expected to integrate well with its hybrid cloud strategy, offering synergy opportunities. Consulting revenue was flat, with some clients delaying decision-making, particularly in discretionary projects, impacting in-period signings. Infrastructure revenue declined by 4%, with IBM Z down 14% as the company wrapped up the z16 program. The macroeconomic environment remains uncertain, with potential impacts on client buying behavior and consulting services. IBM's federal consulting business, which is less than 10% of total consulting, could be susceptible to discretionary pullbacks. The company is cautious about the contribution from Consulting for the year, given the current economic conditions. Q: Are you seeing any significant softening in the consumption portion of the Software portfolio, particularly in Red Hat or Transaction Processing? And how is Consulting being impacted by the current macro environment? A: Arvind Krishna, CEO, noted that there was no significant slowdown in the consumption part of the Software business, including Red Hat and Transaction Processing. However, if global GDP slows, there could be a minor impact on Red Hat's consumption business. Consulting is more susceptible to economic pressures, but the impact has been limited so far. James Kavanaugh, CFO, added that the strategic repositioning towards a software-centric model is on track, and Consulting is expected to stabilize. Q: How do you plan to achieve the 5%-plus revenue growth guidance for the full year, especially considering the challenges in Red Hat and Consulting? A: James Kavanaugh, CFO, explained that the growth will be driven by new innovations in infrastructure, contributions from recent acquisitions like HashiCorp, and strong performance in Red Hat. The company expects Red Hat to grow mid-teens for the year, and while Consulting's contribution is expected to be flat, the overall growth drivers remain strong. Q: Can you provide more details on the impact of the federal business and discretionary Consulting projects on your outlook? A: James Kavanaugh, CFO, stated that the US federal business is less than 5% of IBM's total revenue, with 60% being Consulting, which is more susceptible to discretionary pullbacks. However, the impact on the backlog has been minimal. Arvind Krishna, CEO, emphasized that most federal consulting work is mission-critical, reducing the risk of significant impact. Q: What are the dynamics behind the recent performance of the Red Hat business, and how does virtualization play a role? A: James Kavanaugh, CFO, noted that Red Hat grew 13.5% and continues to see strong demand, particularly in virtualization, automation, and Linux capabilities. The consumption-based services moderated to high single digits, but the overall portfolio remains strong. Arvind Krishna, CEO, added that OpenShift is becoming a leading platform for containerization and virtualization, driving long-term growth. Q: With the recent FX changes, why hasn't the free cash flow guidance been adjusted upwards? A: James Kavanaugh, CFO, explained that while FX changes could provide tailwinds, the company is maintaining its $13.5 billion free cash flow guidance due to the dynamic macro environment. The focus remains on disciplined execution and maintaining a strong liquidity position. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
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.
