IBM Posts Upbeat Q3 Profit, But Revenue Misses Views
International Business Machines Corp. (NYSE: IBM) reported better-than-expected earnings for the third quarter, but the company's revenue missed analysts' expectations.
The Armonk, New York-based company posted quarterly net income from continuing operations of $2.96 billion, or $3.02 per share, compared to $3.46 billion, or $3.46 per share, in the year-ago period. Its operating earnings from continuing operations dropped 9 percent to $3.34 per share from $3.68 per share.
Its total revenue from continuing operations dropped 13.9 percent to $19.28 billion. However, analysts were expecting earnings of $3.30 per share on revenue of $19.62 billion.
The average estimate among 248 Estimize users was for earnings of $3.37 per share and revenue of $19.6 billion.
Americas' revenue fell 10 percent year-over-year to $9.1 billion in the latest quarter, while revenue from Europe/Middle East/Africa declined 16 percent to $6.1 billion. Asia-Pacific revenue slipped 19 percent to $4.1 billion.
Global Technology Services segment revenue fell 10 percent to $7.9 billion, while Global Business Services segment revenue dipped 13 percent to $4.2 billion. Revenue from IBM's Software segment declined 10 percent to $5.1 billion, while revenue from the Systems Hardware segment dropped 39 percent to $1.5 billion for the quarter. Global Financing segment revenue shrank 8 percent to $0.4 billion for the quarter.
Its gross profit margin from continuing operations expanded to 48.9 percent in the third quarter, from 48.6 percent in the year-ago quarter.
Total expense and other income from continuing operations shrank 11 percent year-over-year to $5.8 billion.
"In the third quarter we again made progress in the transformation of our business to higher value, with strong growth in our strategic imperatives and expanded operating margins," said Ginni Rometty, IBM chairman, president and chief executive officer. "We are continuing to make significant investments to build platforms around analytics, cloud, mobility and security that lay the foundation for a new era of cognitive business -- where we see long-term value for our clients and shareholders."
IBM projects full-year GAAP earnings of $13.25 to $14.25, and operating earnings of $14.75 to $15.75 per share.
IBM shares 3.44 percent to $144.09 in the after-hours trading session.
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