IBM has closed 2019 with thin sales growth which was saved by a thriving cloud business and propped up by its acquisition of Red Hat.
Revenues increased by 0.07 percent for the fourth quarter of 2019 to $21.78 billion. For the full 2019 year, revenues increased by 0.2 percent to $77.1 billion adjusted for divested businesses and currency. Without these adjustments, revenues dipped by 3.1 percent. Pre-tax operating income, however, dropped by 10 percent to $10.17 billion.
IBM’s Cloud and Cognitive Software segment did well, with the firm adding almost $1 billion in revenues to this business unit year on year, representing 4.5 percent growth.
Red Hat added more than $1bn in revenues to IBM’s business in Q4 alone, equating to 24 percent revenue growth – a record quarter for the business and acceleration on its Q3 growth of 20 percent.
IBM’s Cloud and Data Platforms sub-segment, which includes Red Hat, grew revenues by 20 percent.
Its Systems segment, which includes servers, mainframes and storage, had a good Q4 but a lacklustre overall 2019. Sales grew by 16 per ent in the last three months of the year to $3 billion, driven by the success of its IBM Z mainframes which grew revenues by 63 percent annually. Storage revenue grew by three percent in Q4, claims IBM. But for the full year, Systems sales fell by five percent.