International Business Machines Corp's revenue rose for the first time in 23 quarters, beating analysts' estimates, but the company warned that a higher tax rate this year would eat into its profit.
"During 2017, we strengthened our position as the leading enterprise cloud provider and established IBM as the blockchain leader for business", Rometty said.
The company will "maintain a high level of investment" in 2018, James Kavanaugh, its new CFO, told analysts, adding: "This is important as we continue to build out capabilities in AI, in cloud, in security, and in blockchain, just to name a few".
Revenue rose 3.6 percent to $22.54 billion from a year ago, compared to the analysts' average estimate of $22.06 billion.
IBM's cloud revenue for the full year was up 24 percent year over year to $17 billion.
Strategic Imperatives (a handful of operations IBM sees as key to its business) revenue was $11.1bn, a 17 per cent year-on-year jump, or 14 per cent if you adjust for currency rates. If you adjust for currency rates, revenues were up one per cent, which, well, is still greater than zero. IBM's free cash flow was $6.8 billion. The company returned 75 percent of that amount to shareholders, sustaining a dividend that has made it the stock a favorite of institutional investors.More news: US Supreme Court to hear Trump travel ban case
IBD'S TAKE: IBM shares are up 22% from an August low, climbing the right side of a possible 11-month base pattern.
However, IBM forecast an operating profit of at least $13.80 per share for 2018, compared with $13.80 in 2017 and market expectations of $13.92, according to Thomson Reuters I/B/E/S.
"The strategic imperatives segment remains the main fuel in IBM's diesel engine heading into 2018 as it represents roughly 50% of revenue and is growing with double digits", Ives wrote, "thus helping neutralize some of the massive headwinds on its traditional mainframe hardware business". "Cloud in Technology Services and Cloud Platform was really disappointing".
Big Blue reported a solid quarter relative to expectations and showed growth in its "strategic imperatives" revenue, which includes analytics, cloud and newer businesses. Revenue has been sliding at IBM.
In terms of revenue growth, its cloud and IT hardware businesses posted the strongest revenue growth. Thursday reported a loss for the fourth quarter, hurt largely by a hefty charge related to a new United States tax reform.
The company took a one-time charge of $5.5 billion in Q4 as a result of the new US tax law.
In its full-year financial results, IBM highlighted $36.5 billion in earnings from "strategic imperatives", which encompass the company's newer initiatives like artificial intelligence, cloud computing and data analytics.