IBM forecasts full-year profit above estimates on cloud growth

This translation has been automatically generated and has not been verified for accuracy.International Business Machines Corp forecast full-year profit above market expectations on Tuesday after reporting surprise growth in quarterly revenue, boosted by its high-margin cloud computing business, sending its shares up more than 4 per cent.

IBM bought Linux maker Red Hat Inc in a $34 billion deal last year, its biggest acquisition so far, in a push to expand its subscription-based software business.Revenue from the cloud business rose 21 per cent to $6.8 billion in the fourth quarter, its largest so far. IBM reported adjusted gross profit margin of nearly 52 per cent for the quarter, a rise of 230 basis points, which was its largest in more than 10 years.

Revenue from the cloud and cognitive software segment, which includes Red Hat, rose 8.7 per cent to $7.2 billion in the fourth quarter ended Dec. 31.

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