IBM Common Stock (NYSE: IBM) stock fell over 10.8% on Jan 22nd, 2021 (as of 10:04 am GMT-5; Source: Google finance) after the company posted mixed results for the fourth quarter of FY 20. Cloud & Cognitive Software revenues was down 4.5 percent (down 6.6 percent adjusting for currency) in Q4 to $6.8 billion. Cloud & Data Platforms grew 9 percent (up 6 percent adjusting for currency) driven by Red Hat during the period. Cognitive Applications revenue was flat (down 2 percent adjusting for currency), due to growth in Security and IoT in Q4. Global Business Services revenues were down 2.7 percent (down 5.2 percent adjusting for currency) to $4.2 billion, driven by declines in Application Management and Consulting. Global Process Services revenue grew.
Cloud revenue rose 16 percent (up 14 percent adjusting for currency). Global Technology Services, that includes Infrastructure & Cloud Services and Technology Support Services revenues were down 5.5 percent (down 7.8 percent adjusting for currency) to $6.6 billion. Cloud revenue was up 4 percent (up 1 percent adjusting for currency). Systems revenues were $2.5 billion, which reflects decline of 17.8 percent (down 19.4 percent adjusting for currency), driven by declines in all Systems Hardware platforms, due to the impact of product cycle dynamics. Cloud revenue was down 18 percent (down 19 percent adjusting for currency). Gross profit margin of the segment was up 380 basis points. Global Financing revenues were down 4.8 percent (down 6.0 percent adjusting for currency) to $286 million, due to the wind-down of OEM commercial financing.
IBM in the fourth quarter of FY 20 has reported the adjusted earnings per share of $2.07. The company had reported 8 percent fall in the adjusted revenue to $20.4 billion in the fourth quarter of FY 20, missing the analysts’ estimates for revenue of $20.7 billion.
Additionally, In the fourth quarter, the company generated net cash from operating activities of $5.9 billion. IBM’s free cash flow generated was $6.1 billion. The company returned $1.5 billion to shareholders in dividends. IBM ended the fourth quarter with $14.3 billion of cash on hand, including the marketable securities, which is an increase of $5.3 billion from year-end 2019. Debt, including Global Financing debt of $21.2 billion, were of total $61.5 billion, down $3.9 billion since the end of the third quarter, and down $11.5 billion since closing the Red Hat acquisition.