IBM announces higher-than-expected revenue growth, what is the reason for the win?

IBM has released its second quarter 2021 earnings report. Revenue was 18.7 billion dollars (about 2 trillion yen), an increase of 3% from the same period of the previous year, and it is said that the result exceeded expectations.

IBM Reports 2021 Second-Quarter Results

https://www.cnbc.com/2021/07/19/ibm-earnings-q2-2021.html

IBM reports 3% growth in Q2 revenue, earnings beat expectations | ZDNet
https://www.zdnet.com/article/ibm-reports-3-growth-in-q2-revenue-earnings-beat-expectations/

IBM says the 3% year-on-year increase is the highest growth rate in the last three years. This is believed to have been affected by the epidemic of the new coronavirus disease (COVID-19), even with the fact that economic activity, which had been stagnant in 2020, has begun to resume globally. Growth is expected to continue until the end of 2021.

Looking at it in more detail, the largest growth was in the 'Cloud & Cognitive Software' division, up 6% to $ 6.1 billion (about 668 billion yen), and in the 'Global Business Services' division, up 12% to $ 4.34 billion (about 4750). It is 100 million yen). Cloud & Cognitive Software was originally called 'AI Application' and provides business construction services that utilize AI and IoT. 'Clients are accelerating digital migration using the cloud and AI, gaining operational insights and growth opportunities, as well as increasing productivity,' said Jim Kavanaugh, IBM's Chief Financial Officer. I commented.

In addition, analysts at FactSet, an investor software company, estimated that the Global Technology Services division would generate $ 6.23 billion in revenue, but in reality it was $ 6.34 billion. It was about 649 billion yen), which was slightly higher than expected. Global Technology Services is planned to be spun off in 2021, and the new company name will be 'Kyndryl'.

On the other hand, the 'Systems' division, which includes hardware and OS software, decreased by 7% year-on-year to $ 1.71 billion (about 187 billion yen). The Global Financing division also fell 8.6% to $ 242 million.

IBM has seen little sales growth over the past few years and has continued to decline for 34 consecutive quarters, with growth of 0.9% in the first quarter of 2021. For this reason, it was surprising that the increase in profits over the first quarter was reported. The adjusted earnings per share is estimated at $ 2.31 (approximately 253 yen).