IBM earnings Q3 2019


IBM shares moved 5% lower after the company issued weaker-than-expected third-quarter revenue on Wednesday.

Here’s how IBM did:

  • Earnings: Excluding certain items, $2.68 per share, vs. $2.67 per share as expected by analysts, according to Refinitiv.
  • Revenue: $18.03 billion, vs. $18.22 billion as expected by analysts, according to Refinitiv.

IBM’s revenue has now dropped for five straight quarters as growth in the company’s cloud business hasn’t been able to make up for declining sales in its services, hardware and financing businesses. Revenue in the third quarter fell about 4% on an annualized basis, IBM said in a statement, even with contributions from Red Hat, an acquisition that closed in the third quarter. Red Hat revenue grew 19% in the quarter on a normalized basis, up from the 14.8% growth in Red Hat’s last quarter as an independent company. IBM’s revenue has now gone down for the fifth consecutive quarter.

IBM revenues chart 10162019 1

IBM’s biggest segment, Global Technology Services, which includes technology support services as well as infrastructure and cloud services, came up with $6.70 billion in revenue. That’s down 5.6% from the year ago period and just below the $6.75 billion consensus estimate among analysts surveyed by FactSet.

The GTS segment saw lower customer business volumes than IBM had expected in the quarter, finance chief Jim Kavanaugh told analysts on a conference call with analysts. “That is high-value, high-profit, and when it hurts you at the latter part of the month,”…


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