IBM CEO Arvind Krishna speaks at an IBM facility in Poughkeepsie, New York, on October 6, 2022. IBM announced a $20 billion investment during President Biden’s visit will be for research, development and production of semiconductors, mainframe technology, artificial intelligence and quantum computing in the Hudson Valley.
Dana Ullman | Bloomberg | beautiful pictures
IBM Shares jumped as much as 6% in extended trading on Wednesday after the tech group beat analysts’ estimates for the third quarter and scrapped its growth forecast for the full year.
Here’s how the company did it:
- Income: $1.81/share, adjusted, compared with $1.77/share as expected by analysts, according to Refinitiv.
- Turnover: $14.11 billion, compared with $13.51 billion as analysts predicted, according to Refinitiv.
Revenue rose 6.5% from a year earlier, according to a statement.
“Given our year-to-date results, we now expect full-year revenue growth above the average of our single-digit model,” Chief Executive Officer Arvind Krishna said in the statement. you contradict.
The company ended the third quarter with a loss of $3.21 billion due to continued operations, compared with earnings of $1.04 billion in the previous quarter. IBM splits its managed infrastructure services business into Kyndryl in November 2021. In the third quarter, IBM paid a one-time cashless pension settlement fee associated with the transfer of certain obligations and pension assets to third-party insurers . IBM reported an adjusted pre-tax margin of 13.9%, while analysts polled by StreetAccount were looking for 15.1%.
Software revenue reached $5.81 billion. That represents growth of nearly 7.5% year-over-year and exceeds the $5.54 billion consensus estimate among analysts polled by StreetAccount. Revenue from transaction processing software increased 23%.
Consulting revenue came in at $4.70 billion, up 5.5% and above the StreetAccount consensus of $4.51 billion. The consulting unit’s pre-tax profit margin narrowed from 10.5% to 9.8%.
Infrastructure segment reached USD 3.35 billion, up 14.8% and higher than USD 3.06 billion consensus of StreetAccount. Revenue from IBM’s z Systems mainframe line grew 88%. Sales of z16 mainframe computers start in second quarter.
During the quarter, IBM announced the acquisition of the consulting firm Dialexa and start the visibility software Databand.aiwith new server contains its Power10 chips.
Despite the after-hours move, IBM stock is down 8% so far this year, while the US S&P 500 stock index is down nearly 23% year-over-year.
Executives will discuss the results with analysts in a conference call that begins at 5 p.m. ET.
This is breaking news. Please check back for updates.
Correction: The previous version of this story had incorrect sales growth numbers.
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