IBM: Fiscal 4Q18 Financial Results

IBM Corp. reports 4Q18 financial results ended December 31, 2018, returning to full fiscal year revenue growth, but only 0.6%.

As usual the company reveals only one figure for the quarter on its storage business: -7% Y/Y in revenue for storage hardware corresponding to quarterly sales of $456 million according to our calculation after also a decrease (-6%) in the last three-month period and down as much as -15% in 1FQ18 after a small increase (2%) in 2FQ18.

In 2017, we estimated annual storage revenue would reach $2,337 million up 7% from 2016. For 2018, considering a total decrease of around of 26%, final result is approximately $1,730 billion or less than $2 billion since a long time.

The company recorded declines in midrange, mitigated by continued strong growth in AFAs. The storage market remains very competitive, with ongoing pricing pressures. The firm is continuing to introduce new innovations and functionality. For example, in December Big Blue extended its next generation NVMe technology into the midrange, with strong initial client adoption. It will continue to roll out NVMe across the storage portfolio in the first half of 2019. But it’s not enough.

Recent acquisition of Red Hat would help boost cloud computing sales in 2019.

Globally IBM continues to invest and take actions to shift business toward higher-value areas like hybrid cloud and AI, but no decision were taken on storage hardware, poor business and probably not profitable, but it will be very difficult for many big, old and loyal customers to accept such a retirement from their preferred vendor.

Revenue Growth of IBM Storage Products

To read the earnings call transcript