After a prolonged five years of continuous drop in sales, IBM states that it will finally show its investors that it can rise again.
Some of that growth in sales will be coming from one of the legacy of the company, its hardware business, rather than the services that are new like; data analytics and cloud on which IBM pinned it prospects for the growth.
On Tuesday, on a call for discussing earnings, Martin Schroeter, the Chief Financial Officer said; in te last quarter of the year that was historically the strongest of IBM-revenue will be sequentially improving much as by $2.9 billion, rise in the parts by sales of its new server of mainframe. The fourth-quarter revenue is estimated to be $22 billion to $22.1 billion that will be representing as much as 1.5% leap from the similar period in 2016. It also tops the estimated average by analyst of $21.8 billion.
An analyst at Edward Jones and Co. said; “The mainframe is going to drive a lot of the positive growth in the fourth quarter. When you’re selling mainframes, you’re also selling a lot of software and services with that.” A hold he rates the stock.
But the business that is mainframe is cyclical, and analysts aren’t convinced about the sustain growth of IBM after the server sales starts to taper off. To prove that it has reached the point of inflection, IBM will need to show that in particular it’s newer other categories of business including services and cloud software. Olson said it can pick up the slack. In few of those areas analysts visions a positive signs, but are looking for sustained growth so that the company can finally climb out of its gutter.
The head of Technology Research at Insights of GBH, Daniel Ives said; “They definitely have some potential going into 2018 in certain parts of the business, and you couldn’t say that a few years ago. It’s an execution story and 2018 will be a huge proving year for Rometty and IBM.”
The shares have risen by almost 5.3 percent to $154.33, in late trading.