Net profit of the American International Business Machines Corp. – IBM (NYSE: IBM), the world's largest supplier of computer services, in the fourth quarter of 2016 grew by 1% to $ 4.5 billion compared with $ 4.46 billion in the same period of the previous year, according to a company press release.
Earnings per share increased to $ 4.72 from $ 4.59 a year earlier. The quarterly profit excluding one-off items amounted to $ 5.01 per share.
IBM's quarterly revenues decreased by 1% to $ 21.77 billion; the decline in revenue was recorded in for the 19th quarter in a row.
Nevertheless, profit and revenue performance exceeded the expectations of experts. Experts polled by FactSet, on average, had expected an adjusted profit of the company at $ 4.88 per share on revenue of $ 21.63 billion.
IBM is taking active steps to change the business structure in an effort to reorient its production hardware on areas such as business intelligence, "cloud" and mobile services as well as security.
IBM's revenue in the clouding services in the last quarter jumped by 33% to $ 4.2 billion, and for the full 2016 year, revenue in this segment increased by 35%, reaching $ 13.7 billion.
The division engaged in production of hardware and software has reduced revenue in the fourth quarter by 12.5%, to $ 2.5 billion.
"In 2016, we made a major investment again, increased spending on research and development and acquired 15 companies - the total cost of all this amounted to more than $ 15 billion” - said senior vice president and chief financial officer at IBM, Martin Schröter.
At the end of 2016, IBM's net income declined by 10%, to $ 11.872 billion, and revenues decreased by 2%, to $ 79.9 billion.
According to IBM forecast, its profit excluding one-off items in 2017 will be at least $ 13.8 per share. Analysts' consensus forecast for this indicator was $ 13.74 per share.