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IBM stock rises after topping Q4 estimates

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Yahoo Finance's Jared Blikre details IBM's Q4 earnings report in which it beats estimates.

Video transcript

- IBM earnings just crossed the wires, and let's head right over to Yahoo Finance's Jared Blikre with the details. Jared.

JARED BLIKRE: That's right. We have the stock up about 7% in after hours trading and here are the numbers. For the fourth quarter, revenue came in at $16.7 billion, beating the street estimate of $16 billion. When you break it down by segment, we have consulting segment revenue-- that's $4.75 billion, up 13% year-over-year; software revenue-- $7.27 billion; infrastructure-- $4.41 billion, that's a slight drop year-over-year; and then financing revenue of $172 million-- that is down 30% year-over-year.

Now they're operating EPS, that came in at $3.35, beating the Wall Street estimate of $3.23. And then adjusted gross margin came in at 58%, beating the estimate of 56.1%.

I do have some commentary by the CEO Arvind Krishna, said, "We increased revenue in the fourth quarter with hybrid cloud adoption driving growth in software and consulting. Our fourth quarter results give us confidence in our ability to deliver our objectives of sustained mid-single-digit revenue growth and strong free cash flow in 2022."

Here's another note. IBM's post-separation baseline, free cash flow for the year was $7.9 billion, excluding certain charges and pre-separation activity. Also, they ended the year with $7.6 billion of cash on hand, and that is down $6.7 billion from year-end 2020. And companies on its earnings call tonight is going to discuss their 2022 expectations.

And I just want to chart this real quickly. IBM has actually been an outperformer over the last 2 months when we saw tech and especially software really flag. So some of these legacy brands, like IBM and also Cisco, kind of bucking the trend there over the last 2 months. You can see, up about 10%.

- Jared Blikre, thank you so much for that breakdown.

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