IBM (IBM) Totally Blew It Out of the Sky With Huge Cloud Sales - TheStreet

Updated from Jan. 19 with conference call details

IBM (IBM) - Get Report notched quite the impressive year for cloud sales.

The company has increasingly turned its focus toward becoming a software-as-a-service (SaaS) provider amid slowing PC sales, and as more businesses move their data to cloud-based platforms. That move seems to be paying off, as the company said Thursday its technology services and cloud platforms saw revenue increase 1.7% year-over-year to $9.3 billion. Sales related specifically to the cloud surged 33% in the fourth quarter. For the full year, IBM said cloud revenue rose 35% to $13.7 billion.

The cloud business now represents about 17% of IBM's overall business. 

Strength in the cloud ultimately helped power IBM's better-than-expected fourth quarter. 

IBM beat on its top and bottom line for the fourth quarter of 2016 and issued upbeat earnings guidance for 2017. For the fourth quarter, the technology giant posted adjusted earnings of $5.01 per share, exceeding analysts' expectations of $4.88 per share. Revenue declined 1% year-over-year to $21.8 billion, but still managed to beat Wall Street's estimates for $21.6 billion in revenue. 

IBM's systems unit, however, which includes hardware and operating systems software, slumped 12.5% year-over-year to $2.5 billion in revenue. 

The company also issued a positive outlook for 2017, forecasting adjusted earnings of at least $13.80 per share. That was slightly higher than analysts' projections for adjusted earnings of $13.74 per share. 

Shares of IBM were falling 1.5% to $164.23 in pre-market trading on Friday, a modest recovery from being down as much as 2.5% after the report hit the wires.