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International Business Machines Corp (IBM) threw more than 6 % in trading after Wednesday hours after it revealed that 15 US federal contracts – about $ 100 million – were canceled or stopped under the Trump Administration Management Initiative (DOGE).
The setback eased the report of the first quarter of the steel Big Blue The profitables ’profit actions are surprised by the rare second -quarter revenues of $ 16.4 billion to $ 16.8 billion, higher than the LSEG consensus of $ 16.3 billion.
IBM tariff meters with a rare quarterly directive
Some analysts said that the cancellation tightened IBM at a time when American definitions eroded the global economic view.
The company separated from its long practice of not issuing quarterly expectations to improve the investor confidence. It also reported better profits than expected in the first quarter and maintained its goal of achieving at least 5 % revenue growth on the basis of a fixed currency in 2025.
“We have now chosen, in light of the indisputable uncertainty that occurs in the market, to give the scope of revenue in the second quarter,” said Cavano. “We felt that we were exposed to the largest possible transparency of our group of investors.”
Although the primary software sector in IBM grew by 7 % to $ 6.3 billion, and the revenues of the first quarter increased from 1 % to 14.5 billion dollars, analysts reported the cancellation that depends on DOGE as a warning sign of discretionary technology. “Investors were looking for perfect results for photos. The federal retreat is injected by fresh uncertainty,” said Amt Daryani from Evercore ISI on Bloomberg TV.
The guidance also presses the cost and new US tariffs on their competitors such as Acceneture, Deloitte and Booz Allen. IBM insists that a universal and limited imprint from the non -American exposure protects it from the most severe tariff repercussions, but Cavano indicated that it was “evaluating alternatives to mitigate the fees,” Kavano pointed out.
IBM enhances cloud growth to move in the challenges of consulting
IBM bent over cloud and artificial intelligence services to compensate for the slowdown consulting. The company said that the reservations associated with artificial intelligence programs and services exceeded $ 6 billion since mid -2013, with about 80 % of acting through its consulting arm.
IBM recently noted that it will issue the latest version of its central devices that include new updates aimed at accelerating the adoption of artificial intelligence.
IBM Z17, the latest version of the central computers. The company says that this main fully encrypted frame is supported by the IBM Telum II processor and is designed for more than 250 cases of Amnesty International, including artificial intelligence agents and AI.
The central vehicle looks like an old hat, but it is used by 71 % of Fortune 500 companies today, According to For one source. In 2024, the value of the Mainframe market was estimated at about $ 5.3 billion, for each future of a consulting company market.
CEO Arfind Krishna launched the “liquid” macro background, but said that IBM “did not see a financial difference in the customer’s purchase behavior.” The company again confirmed its goal of growing fixed work revenues by at least 5 % and 13.5 billion dollars in the free cash flow of 2025.
Despite the decrease of Wednesday to about $ 230 in late trading, IBM shares still rise by 12 % to the year, outperforming the S&P 500 by 8.6 %. Some governor managers view the strong technology as a defensive play amid price -dependent fluctuations. However, Michael Ashley Schulman at Cio Capital Caio Michael Ashley warned that “cancellation of contracts can be burdened with feelings if the economy weakens more.”
Next month, IBM will hold an annual meeting for shareholders, as investors are expected to pressure the administration on moving in federal budget discounts and maintaining the growth moved by artificial intelligence.
The IBM leadership has admitted more caution about the consulting arm, which CEO Arvind Krishna called “especially at risk to the estimated reduction and associated initiatives.”
However, Bloomberg Intelligence Anurag Rana and Andrew Girard warned to note after profits that the company’s expectations may reduce the deeper economic slowdown, risk more pressure on revenues on the consulting sector in 2025.
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