IBM predicts cost reduction again in the calendar next year. This may mean one thing for the worker’s corps.
Despite the 9 % rise in stock prices after publication of BIG BLUE’s 4th quarter and December 31st year (PDF), It Mammoth re -engraved operating expenses. I guaranteed an analyst with the call for the revenue I was aiming for.
IBM is taking costs including “rebalancing labor”.
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“Our productivity initiative has made it possible to invest in innovation, skills, and the ability to the market,” said CFO James Kabannow. “We have achieved this, but at the same time we have expanded operating margin and free cash flow. This has improved the flexibility of finance.
“This will remain in the future playbook, supporting powerful free cash flow that will be carried out by $ 3.5 billion, except for 2024, and will grow beyond revenue.”
The free cash flow is $ 12.7 billion, and IBM says this is the strongest in several years.
“We hope that employees will re -adjust the employees considerably in the past few years,” said Kavanaus. “We are also increasing the profit of $ 241 million from the sale of meteorological companies.”
In 2024, IBM quietly fired a lower ratio of labor. At the end of 2023, IBM had 288,000 staff, but there are no new numbers.
Kavanaus has also confirmed that “the reducing discretionary spending can promote digital transformation and investment in the entire GENAI.” The client is doing the same. “We’ve seen the play through 2024,” he added.
All of this is part of the reconfirmation of IBM to a place three years ago, and I want to be the necessary skills that companies expect in the near future. This began with the 2021 sales of the infrastructure service BIZ, which is currently known as KYNDRYL.
Regarding the reasons for the rise in stock prices, IBM reportedly reported $ 17,55 billion, increased from $ 17.45 billion, and had a 3.74 consensus adjusted per share. It was $ 3.92. The revenue increased 1 % year -on -year in the quarter, to $ 62.8 billion throughout the year.
In the fourth quarter, net income fell 11 %, $ 2.9 billion, and $ 6 billion in 2024 calendars by 20 %. The IBM software category is currently 45 % of the total revenue, so the margin is high. The decline in profits is related to the decline in consulting, which also has a high margin.
Software revenue was $ 7.92 billion to 8 % year -on -year, led by Red Hat, automation, transaction processing, data & AI, and security, and increased from $ 25 billion to $ 27 billion.
Consulting revenue decreased by 2 % in the fourth quarter to $ 5.17 billion, fell from $ 2024 to $ 206.9 billion. CFO says: 。 “
The memo: “The generated AI has provided a new reservation of about $ 1.5 billion in a quarter, as the client recognizes the value of our extensive industry and corporate expertise in accelerating digital transformation. Kavanaugh said.
It’s almost three years since the last Z series main frame was released. As a result, the revenue generated by the infrastructure division fell 8 % year -on -year in the fourth quarter, decreasing 4 % in 2024 to $ 14 billion.
“This product cycle surpasses the previous cycle, and the MIPS installed in the program has increased by more than 30 % as the client’s capacity continues to increase. IBMZ is a permanent platform for mission -critical workloads. As it is, not only adopting hardware, but also related software, storage.
At the call of revenue, CEO’s Arvind Krishna spoke widespread and eagerly about AI. There is no surprise. “Genai Book of Business Book has grown and continues to grow every quarter, exceeding $ 5 billion. It is increasing every quarter of about $ 2 billion. Approximately one -fifth of this business book is software. The remaining four -one -fifth is consulting, “he said.
“Our AI portfolio has been adjusted to meet the diverse needs of enterprise clients, so that you can mix the model, IBM, your face, meta, and Mistral open models. Designed for specific purposes. IBM’s granite model is more expensive than a large -scale alternative.
He is providing customers with RHEL AI and OpenShift AI, which are also found in AI support, including IBM’s Watsonx middleware and Z Watsonx code assistants, “to customers. I mentioned. Watsons orchestrate. “
In a business environment, CEO states: “Geopolitical tensions may be on a better orbit, but it has not been solved. Interest rates, inflation, population statistics, and lack of supplementary chains, these problems are these problems. I think everything has been taken over.
“I say more optimistic in the business environment, more optimistic in ’25, compared to ’24, and we know all the reasons for it. — Do you think growth is reducing friction?
One of the constant things in IBM is the continuous need to reduce costs. Please enjoy the details on IBM investor days on February 4th.
For the next year, IBM estimates a 5 % revenue growth rate and a free cash flow of $ 13.5 billion compared to 2024. ®
