IBM revenues drop for fifth quarter consecutively
IBM shares are up about 25 per cent since the beginning of the year
IBM (IBM:NYSE) has issued weaker than expected third-quarter revenue resulting in its shares decreasing by 5 per cent.
Earnings, excluding certain items, was at $2.68 per share, compared to $2.67 per share expected by analysts, while revenue was $18.03 billion, down 3.9 per cent.
IBM’s revenue has dropped for five quarters in a row with revenue in the third quarter falling about 4% on an annualised basis, IBM said in a statement, even with contributions from Red Hat (up 19pc), an acquisition that closed in July 2019.
IBM’s biggest segment, Global Technology Services, which includes technology support services as well as infrastructure and cloud services, contributed to $6.70 billion in revenue, down 5.6pc from the same period in 2018.
The Cloud & Cognitive Software sector which includes Red Hat; cognitive applications; and transaction processing platforms came up with revenues of $5.3 billion, up 6.4pc.
IBM expects GAAP diluted earnings per share for the full year to be at least $10.58.
The company continues to expect operating (non-GAAP) diluted earnings per share of at least $12.80.
IBM continues to expect free cash flow of approximately $12 billion, with a realisation rate over 100% of GAAP net income.