Source: The Wall Street Journal
A $5.5 billion charge related to the new U.S. tax law pushes fourth-quarter results into the red
International Business Machines Corp. reported higher revenue for the first time in 23 quarters and signaled continued growth into 2018, giving Chief Executive Ginni Rometty breathing space as she tries to turn around the century-old tech giant.
Fourth-quarter revenue rose 3.6% to $22.54 billion. The last time IBM had revenue growth from the prior year was the first quarter of 2012, Ms. Rometty’s first as chief.
Several factors drove growth in the latest quarter: sales of industrial-strength computers—which the company typically refreshes every few years— rose 32% to $3.33 billion, while cloud-computing revenue climbed 30% to $5.5 billion. Also, currency exchange rates have been working in IBM’s favor lately, accounting for 3 percentage points of the quarter’s revenue growth after years of being a headwind.
IBM said it took a $5.5 billion charge related to the new U.S. tax law, helping to push it into the red for the period. Its tax rate, excluding the charge but including certain one-time benefits, was 6%.
In all, the company reported a fourth-quarter loss of $1.05 billion, or $1.14 a share, compared with profit of $4.5 billion, or $4.72 a share, a year earlier. Read the rest of this entry »