International Business Machines Corporation [NYSE: IBM] has released its Q2 results, and they are a mixed bag. Overall revenues declined by 4.2% to stand at $19.16 billion. This was largely due to both internal and external factors. One of the main external factors that have led to a slowdown in revenues is currency fluctuations. Internally, issues such as weakness in the company’s international technology services segment have played a role to the slower growth. However, there are aspects to the business that have made a strong showing. For instance, the company’s cloud business continues to get stronger, and are up by 5% year-over-year. Digging deeper into the company’s cloud business, growth has mainly come from data and cognitive applications. The company’s revenues from these two segments grew by 7% and 5% respectively.
Overall revenues are likely to be much higher in coming quarters. That’s because this is the last quarter that IBM is announcing results without including those from Red Hat, the open-source software company that IBM recently acquired for $34 billion. Red Hat is a large company with large numbers, and its results are likely to drive up IBM numbers. In the 2019 financial year, Red Hat made $3.4 billion, and when included in IBM’s full-year results, it will be a huge boost.
From the charts, these results haven’t triggered any major price movement in IBM. On Wednesday’s trading session, IBM was trading in a range between $141.95 and $143.07. These will be the key levels to watch today. If in the day IBM pushes above $143.07 and extends above Wednesday’s high of $143.80, it would be a good indicator of increased bullish momentum. On the other hand, a drop below Wednesday’s low of $141.95, would be a signal to increased bearish momentum in the day.