The accounts of the computer giant IBM presented this Wednesday at the close of the market have disappointed investors and caused a drop in the company’s price outside of normal trading hours. The company’s turnover increased by 1%, but consulting income fell by 0.2% and infrastructure and finance income also fell. In parallel, the company has announced the purchase of cloud computing firm HashiCorp for $6.4 billion.
IBM achieved revenues of 14,462 million dollars (about 13,500 million euros at the current exchange rate), 1.5% more than in the same period last year. Software revenues increased 5%, to $5,889 million, while those derived from the consulting business fell 0.2%, to $5,186 million. There were also declines in the area of infrastructure and finance. Profits increased by 73%, to $1,605 million.
“We began the year with strong revenue and free cash flow growth, reflecting the strength of our hybrid cloud and AI strategy. “We continue to leverage our customers’ enthusiasm and demand for enterprise AI,” said Arvind Krishna, president and CEO of IBM, in a statement, reiterating the goal of achieving free cash flow of $12 billion. Dollars.
In the first quarter, net cash flow from operating activities was $4.2 billion, up $400 million, while free cash flow was $1.9 billion, up $600 million. . In the last twelve months, net cash from operating activities of $14.3 billion and free cash flow of $11.8 billion.
Corporate operation
IBM took advantage of earnings day to announce its intention to acquire HashiCorp, at a price of $35 per share in cash, implying a valuation of the company’s assets of $6.4 billion. The purchase is IBM’s largest since it bought software firm Red Hat in 2019 for $31.8 billion. The acquisition will create a comprehensive end-to-end hybrid cloud platform for the era of artificial intelligence, according to IBM.
The transaction is expected to close later this year, subject to HashiCorp shareholder approval and regulatory approvals. “The combined portfolios of IBM and HashiCorp will help clients manage the increasing complexity of applications and infrastructure and create a comprehensive hybrid cloud platform designed for the AI era,” said Krishna.
The deal is another step by Krishna to turn the former technology hardware company into one focused on high-growth software and services. IBM has already made other acquisitions in this area, such as Apptio for $4.6 billion last year, and has divested managed infrastructure, meteorology and healthcare businesses.
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