IBM stock moved as much as 5% higher on Tuesday after the company reported fourth-quarter results that beat analysts’ estimates and forecast earnings growth in 2020.

Here’s how the company did:

  • Earnings: Excluding certain items, $4.71 per share, vs. $4.69 per share as expected by analysts, according to Refinitiv.
  • Revenue: $21.77 billion, vs. $21.64 billion as expected by analysts, according to Refinitiv.

Revenue grew slightly on an annualized basis, IBM said in a statement, after it had fallen five quarters in a row, after the conclusion of an upgrade cycle for its z14 mainframe computer. The company has been shipping a new model, the z15, for more than one quarter now.

In terms of guidance, IBM said that for 2020 it expects $13.35 in earnings per share, excluding certain items. That’s above the $13.29 consensus from analysts surveyed by Refinitiv, and it implies a 4% increase from the prior year. IBM’s revenue will go up year over year in 2020, Jim Kavanaugh, the company’s chief financial officer, told analysts on a conference call on Tuesday. After the call the stock was up 3.8% in extended trading.

The Cloud and Cognitive Software segment, which encompasses transaction processing platforms, cognitive applications and cloud and data platforms like Red Hat, came up with $7.24 billion in revenue. That’s up 9% year over year and more than the $7.12 billion consensus among analysts polled by FactSet. Revenue from Red Hat, a $34 billion acquisition that closed in July, was up 24% in the quarter. In the prior quarter, Red Hat revenue grew 19%.

IBM’s Global Technology Services segment produced $6.95 billion in revenue, down about 5% year over year and less than the $6.99 billion FactSet consensus estimate. The segment contains infrastructure and cloud services, as well as technology support services.

“In GTS we are going to take aggressive structural actions to reposition the business overall,” Kavanaugh said on Tuesday. He said the changes are meant to boost IBM’s performance in hybrid cloud, whereby organizations rely on multiple computing environments.

The company generated $4.24 billion from its Global Business Services business, including application management, consulting and global process services. That’s down slightly and just lower than the FactSet consensus estimate of $4.26 billion.

IBM’s Systems revenue was $3.04 billion, up 16% and exceeding the $2.84 billion FactSet consensus. Revenue from the z product line, including z15, was up 60% in the quarter.

In the fourth quarter IBM announced a “financial services-ready public cloud” offering that is expected to use the company’s existing cloud infrastructure, and it appointed Thomas Buberl, CEO of insurance company AXA, to its board. And in the past 90 days the public has gotten clarity on Brexit and the first phase of a trade deal between the U.S. and China, Kavanaugh said.

Morgan Stanley analysts led by Katy Huberty cut their rating on IBM to equal-weight from overweight on Friday. “Even assuming modest Red Hat synergies, we now see long-term revenue growth at IBM as less likely without a more meaningful shift in the portfolio,” the analysts wrote. “We see IT budget growth deteriorating in 2020 with risk of further cuts to core IBM profit pools including on-premise infrastructure, consulting, and outsourcing.”

IBM shares are up 3% since the beginning of 2020.

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