NEW YORK (TheStreet) -- Shares of IBM (IBM) are up 0.35% to $164.74 in pre-market trade after it was reported that the IT company won an outsourcing contract from Germany's Lufthansa (DLAKY) worth 1 billion euros ($1.25 billion) that will see the U.S. company take over the airline's information technology infrastructure services division and staff, Reuters reports.
The move is part of plans by Lufthansa to restructure and cut costs as it seeks to compete with fast-growing rivals in both Europe and the Gulf, Reuters said.
Under the seven-year deal, IBM said it will make the airline's IT processes more efficient, such as moving it more toward cloud computing, saving Lufthansa around 70 million euros a year, according to Reuters.
TheStreet Ratings team rates INTL BUSINESS MACHINES CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTL BUSINESS MACHINES CORP (IBM) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."