Stock Alert: IBM Plans To Spin Off Managed Infrastructure Services Unit; Stock Jums 7%
Shares of International Business Machines Corporation (IBM) are rising more than 7% Thursday morning on the news of its plan to spin-off managed infrastructure services unit.
IBM plans to separate its managed infrastructure services unit of its Global Technology Services division into a new publicly-traded company (NewCo) and focus more on the cloud business.
“This creates two industry-leading companies, each with strategic focus and flexibility to drive client and shareholder value,” IBM said.
The spin-off is expected to be completed by the end of next year.
“IBM is laser-focused on the $1 trillion hybrid cloud opportunity. NewCo will have greater agility to design, run and modernize the infrastructure of the world’s most important organizations. Both companies will be on an improved growth trajectory with greater ability to partner and capture new opportunities – creating value for clients and shareholders” said Arvind Krishna, IBM Chief Executive Officer.
Additionally, IBM reported preliminary third-quarter results with adjusted earnings of $2.58 per share and revenue of $17.6 billion.
Analysts polled by Thomson Reuters expect the company to report earnings of $2.58 per share on revenue of $17.54 billion.
IBM stock is currently trading at $134.04. It has been trading in the range of $90.55- $158.75 in the last one year.
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