KD - IBM spin-off Kyndryl says will be profitable this fiscal year stock pops 15% after hours
2023-08-07 17:24:03 ET
Shares of Kyndryl ( NYSE: KD ) surged nearly 15% after hours, after the former infrastructure services business of IBM ( IBM ) said it would be profitable in fiscal 2024, a full year ahead of its previous expectations.
KD stock advanced 14.9% to $14.30 in extended trading.
The company after hours reported FQ1 GAAP loss per share of 62 cents, compared to a loss of $1.11 per share a year ago. Revenue came in at $4.19B and beat expectations by $100M .
KD also raised its fiscal 2024 adjusted EBITDA margin guidance to about 14% from a prior range of 12% to 13%. Additionally, the company upped its adjusted pretax income forecast to at least $100M.
"We now expect to generate adjusted pretax profit this fiscal year and going forward. This return to profit, driven by our strong execution, positions us well to deliver the significant margin expansion we've targeted,” Kyndryl CEO Martin Schroeter said in a statement .
IBM ( IBM ) completed the spin-off of its infrastructure business in November 2021 and named the company 'Kyndryl', in a move that was seen as a push by the chip giant to trim its legacy businesses and focus on its higher-growth software and consulting offerings.
KD's FQ1 revenue fell 2% Y/Y, due to pre-separation actions the company took to exit low-margin work that was a legacy of contracts negotiated by IBM ( IBM ). KD said its latest results reflected $42M in separation-related costs, which are expected to end this year.
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IBM spin-off Kyndryl says will be profitable this fiscal year, stock pops 15% after hours