Yahoo Finance Live anchors discuss IBM beating earnings estimates.

Video Transcript

[AUDIO LOGO]

BRIAN SOZZI: Earnings season in full swing. And with some time until the opening bell, let's check in on a few of those earnings reporters. Let's kick it off here with IBM. Good quarter from IBM.

I've been very critical of IBM the past two years, in terms of execution. But this quarter, a lot seemed to come together, despite the economic slowdown, despite the effects of volatile foreign currencies on their sales and profits.

You look down you scroll through their results, they had total sales up 15% in constant currency. You saw double-digit growth in many parts of their business, notably, I believe was consulting. That was good.

The Red Hat business, those sales are up, constant currency. Look, there's a good quarter from IBM. Came out and reiterated their free-cash-flow guidance of $10 billion. They checked a lot of marks.

BRAD SMITH: Yeah, absolutely. I mean, looking at big blue here and some of the results. 15% revenue growth, they include some of the sales to Kyndryl as well. And then additionally, with the revenue mix that they're highlighting here, 70% revenue mix in software and consulting.

And just going further into that consulting side of the business as well, which saw 16% growth, which is were talking about a moment ago, this is things like technology consulting-- that was up 17% year-over-year-- application operations-- also up 17% year-over-year-- and this business transformation consultation.

So clearly there are customers that are out there that still need just advice on how their organization needs to shift in order to have this kind of digital transformation that's required to better understand their customer, but also the applications necessary just to run their business on a daily basis.

JULIE HYMAN: Yeah, I mean, this is what we've been hearing from Enterprise software companies, right? But to your point, it's interesting that IBM is participating in this fully because it hasn't necessarily been-- and we've been seeing it-- we saw it across the different units, as you talked about.

The dollar did take a bite out of things during the quarter, right? The company said that its gross margin was 52.7%. That did miss analysts' estimates. So some of that could have been due to what was going on with the dollar. Makes sense, this is just what we're gonna hear from most companies that get some of their revenue abroad.

BRIAN SOZZI: Now, what's interesting, too, this is the second very, very large multinational-- you're seeing Procter & Gamble on the screen. That's what I was going to reference here. We had P&G out yesterday, raising prices. Good quarter from that very large, globally exposed company.

And of course, IBM is not the same as P&G. But again, another large multinational out here, pushing through price increases. Sure, feeling the effects of FX. But maybe it's just that these very large multinationals have just guided expectations very well and they're better able to handle this environment than some of the smaller companies. I've been very surprised by the quarters of both these companies.