What happened
Actions of IBM (NYSE: IBM) fell 9.9% on Friday, following the release of the technology giant’s fourth quarter results.
And
IBM’s revenue decreased 6% year over year, to $ 20.4 billion. That was slightly below the nearly $ 20.7 billion Wall Street had expected.
IBM is optimizing its business to focus more on its cloud operations. However, the change is not progressing as well as many analysts predicted. IBM’s total cloud revenue increased by just 10% to $ 7.5 billion, while competitors like Amazon and Microsoft are designed to provide much more impressive cloud growth in your next earnings reports.
IBM’s shares fell sharply on Friday. Image source: Getty Images.
In addition, IBM’s adjusted operating earnings fell 56% to $ 2.07, largely due to a $ 2 billion pre-tax charge related to its restructuring efforts. The company, however, continued to generate money. IBM’s free cash flow for the entire year in 2020 was $ 10.8 billion.
What now
IBM CEO Arvind Krishna is asking investors to remain patient while IBM executes its recovery strategy, but the company’s weak cloud growth is making it more difficult for shareholders to remain optimistic. Many decided to sell their shares on Friday, instead of continuing to wait for IBM to recover its growth.