Kyndryl Holdings, the company that separated from IBM (NYSE:IBM) on November 3, 2021, saw its stock rise by over 13% on Wednesday, after announcing yesterday a better-than-expected Q2 2024 top-line revenue of $4.1 billion, beating the consensus estimate of $3.98 billion. Despite a 3% YoY dip, the company outperformed predictions with a net loss of $0.62 per share. After accounting for one-time items, the loss was $12 million or $0.05 per share, an improvement from the previous year's loss of $281 million or $1.24 per share. This performance surpassed the Thomson-Reuters polled average analyst estimate of a $0.63 per share loss.
The strong performance this quarter was credited to Kyndryl's "three-A initiatives" which involve automation and fostering deeper consulting relationships. These strategies have significantly improved the company's performance, despite an initial setback post-separation from IBM when the company experienced a 39% decrease in stock value.
In response to the positive results, Kyndryl raised its full-year adjusted pretax income outlook from at least $100 million to at least $140 million. The company's shares reached a new high of $17.95 and later settled at $17.73. The announcement also highlighted advanced delivery updates that led to the redeployment of 7,500 delivery staffers and increased annualized cost savings.
InvestingPro Insights
Kyndryl Holdings, a prominent player in the IT Services industry, has seen impressive returns over the last year. According to InvestingPro data, the company's stock is trading near its 52-week high, with a 1-year price total return of 62.78%. Despite not being profitable over the last twelve months, analysts predict the company will turn a profit this year.
InvestingPro's real-time data reveals a market cap of 3550M USD and a revenue of 16.93B USD as of Q1 2024. Although the company's gross profit margin was 15.72% in Q1 2024, it's worth noting that Kyndryl is trading at a low revenue valuation multiple, indicating potential for growth.
For those interested in more comprehensive insights, InvestingPro offers a range of additional tips and metrics for Kyndryl and other companies.
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