New York, January 25th (Xinhua Finance) - International Business Machines Corporation (IBM) released a performance report late on the 24th, showing that the company achieved a revenue of $61.86 billion in 2023, a year-on-year increase of 2.2%.
IBM achieved a gross profit of $34.3 billion in 2023, an increase of 4.93%, and the gross profit margin increased from 54% in 2022 to 55.4% in 2023. After deducting expenses, interest, and taxes, IBM achieved a net profit of $7.502 billion in 2023, significantly higher than the $1.639 billion in 2022. The full year free cash flow for 2023 was 11.2 billion US dollars, an increase of 1.9 billion US dollars year-on-year, higher than the management's expected 10.5 billion US dollars.
The announcement shows that IBM has a one-time non cash pre tax pension expense of $5.9 billion in 2022.
The performance report also shows that IBM's operating revenue in the fourth quarter of 2023 was $17.381 billion, a year-on-year increase of 4.14%, with growth in its three main business sectors of software, consulting, and infrastructure. Adjusted earnings per share were $3.87, higher than market expectations of $3.78. The gross profit margin for the quarter rose to 59.1%, the highest level since 1999.
IBM Chairman and CEO Arvind Krishna stated that driven by the continued application of hybrid cloud and artificial intelligence products, all business segments of IBM achieved growth in revenue in the fourth quarter of last year. The demand for artificial intelligence from customers is accelerating, and the business volume of artificial intelligence, data platform Watson, and generative artificial intelligence has approximately doubled from the third to fourth quarters of last year.
Krishna said that last year's revenue growth met his expectations, while free cash flow exceeded his target. Based on the advantages of the product and the innovation demonstrated, it is expected that the revenue growth in 2024 will be consistent with the model forecast of around 5%, and the free cash flow is expected to be around 12 billion US dollars.
Amit Daryanani, an analyst at Evercore ISI, an investment bank in the United States, had previously predicted that IBM's revenue and earnings per share in the fourth quarter of 2023 would meet or slightly exceed expectations due to some benefits from the weakening US dollar, with a projected free cash flow target of $11 billion to $11.5 billion for 2024.
Due to strong performance in the fourth quarter of last year, IBM's stock price saw a more than 8% increase in after hours trading after the performance announcement.