IBM Shares Fall On Revenues Miss

(RTTNews) - International Business Machines Corp. (IBM) Tuesday reported a profit and revenues for the third quarter that trumped Wall Street estimates. Moving ahead, the company reiterated its full year outlook. However, shares of the company fell 4 percent in extended hours after revenues fell short of expectations.

Armonk, New York-based IBM's third-quarter profit dropped to $2.69 billion or $2.94 per share from $2.73 billion or $2.92 per share last year.

Excluding one-time items, earnings from continuing operations rose to $3.42 per share from $3.26 per share last year. Analysts had a consensus earnings estimate of $3.40 per share for the quarter.

IBM's third-quarter revenues rose to $18.76 billion from $19.15 billion last year. Analysts polled by Thomson Reuters expected revenues of $19.10 billion for the quarter.

IBM is divesting off its low-margin and unprofitable hardware businesses to improve profitability. The company is now striving hard to make IBM a company that provides cloud computing and data analytics.

Chief Executive Ginni Rometty said, "IBM's progress and momentum this year in the emerging, high-value segments of the IT industry are driven by our innovative technology, deep industry expertise and commitment to trust and security."

Total cloud revenue over the last 12 months was $19.0 billion, up 20 percent. The annual exit run rate for as-a-service revenue increased to $11.4 billion, up 21 percent.

Looking forward to 2018, the company continues to expect adjusted earnings of at least $13.80 per share. Analysts currently estimate earnings of $13.80 per share.

IBM closed Tuesday's trading at $145.12, up $3.99 or 2.83% on the NYSE. The stock, however, slipped $6.12 or 4.22% in the after-hours trading.