David A. Grogan | CNBC
Ginni Rometty, Chairwoman, President and CEO of IBM, at the World Economic Forum in Davos, Switzerland.
IBM stock rose slightly after the company released better-than-expected earnings for the third quarter of the year on Thursday. The company will hold a conference call with analysts at 5 p.m. Eastern time.
- EPS: Excluding certain items, $3.30 in earnings per share vs. $3.28 in earnings per share as expected by analysts, according to Thomson Reuters.
- Revenue: $19.15 billion vs. $18.6 billion as expected by analysts, according to Thomson Reuters.
IBM came close to stopping the drought of revenue growth that lasted for 21 quarters, but didn’t manage to do that in the end. IBM revenue has now declined for 22 quarters in a row. Still, The stock went up more than 3 percent in after-hours trading after the earnings beat.
In terms of guidance, IBM expects to finish the calendar year with at least $13.80 in earnings per share. Analysts were expecting $13.75 in earnings per share for the entire year, according to Thomson Reuters.
IBM continues to look to its strategic imperatives — analytics, cloud, mobile and security — for growth, and that segment delivered $8.8 billion in revenue, up 11 percent year over year. Almost 46 percent of all of the company’s revenue for the quarter came from its strategic imperatives, in fact. Cantor Fitzgerald analysts Joseph Foresi and Michael Reid had previously predicted strategic imperatives would contribute about 47 percent of Big Blue’s third-quarter revenue.
Cloud revenue, including cloud delivered as a service, for the quarter was $4.1 billion, up 20 percent from last year. Cloud revenue, including cloud delivered as a service, for the quarter was $9.4 billion, up 25 percent from last year.
IBM’s Technology Services and Cloud Platforms business segment did $8.5 million in revenue in the quarter, down 3 percent year over year, while Cognitive Solutions segment brought in $4.4 billion in revenue, up 4 percent.
In the third quarter, IBM said it was committing$240 million to back an artificial intelligence research lab in conjunction with the Massachusetts Institute of Technology. The company also announced a collaboration around blockchain technology with Dole, Kroger, Unilever and Walmart, among other companies.
IBM stock is down 11.5 percent since the beginning of the year.
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