Despite posting its 19th consecutive quarter of declining revenues, International Business Machines Corp (NYSE:IBM) shares are still comfortably higher after posting good fourth-quarter earnings.
The tech giant posted quarterly revenue of $21.8 billion, which was down 1.2% versus the same quarter last year. But it was nearly $200 million above analyst estimates. Earnings per share came in at $5.01, which was a full $0.13 above expectations.
Net cash from operating activities came in at $2.3 billion for the quarter, while free cash flow was an impressive $4.7 billion. The company spent $1.3 billion in dividends and $0.9 billion in share buybacks in the quarter.
CEO and chairman Ginni Rometty was pleased with 2016’s full-year results. She praised the company’s strategic imperatives -- programs that now generate more than 40% of revenue -- as well as the company’s continued growth in cloud computing. Rometty is also excited about the significant potential of IBM’s Watson program, which is the world’s leading AI platform for business.
The company also gave relatively bullish guidance for 2017, telling investors it expects to generate $13.80 per share in earnings, as well as turning about 90% of earnings into free cash flow. In a world where many tech giants are only marginally profitable -- or worse, losing money -- IBM has consistently delivered good profits.
IBM shares fell in after-hours trading on Thursday, but have nicely recovered on Friday. Shares are up $2.35 each or 1.4% to $169.16 in midday trading, close to their 52-week high of $170.62.
