IBM’s share price dropped in after-hours trading after Q3 revenues narrowly missed market expectations.
While its shares closed at US$232.75, the price plummeted to $214.74 following the release of its earnings report.
IBM reported US$14.97 billion in revenue, less than LSEG’s expected $15.07 billion. However, its earnings per share were US$2.30, above the expected $2.23.
"Our third-quarter performance was led by double-digit growth in Software, including a re-acceleration in Red Hat,” said CEO Arvind Krishna.
While Software’s revenue increased 9.7% to US$6.5 billion, IBM’s Consulting, Infrastructure, and Financing sectors all saw their revenues decline.
Infrastructure’s revenue fell the most, down 7.0% to reach US$3 billion.
The company’s gross profit margin was 56.3%, up 190 basis points.
"Heading into the final quarter of 2024, we expect fourth-quarter constant currency revenue growth to be consistent with the third quarter, with continued strength in Software,” Krishna said.
According to Krishna, IBM expects to deliver more than US$12 billion in cash flow for the year.
It ended the third quarter with US$13.7 billion of cash, restricted cash, and marketable securities, an increase of $0.3 billion from the end of 2023.
As of 9:05 am (AEDT) Thursday October 24, IBM's share price (IBM) was US$226.40. The stock saw a day low of $230.26 and a day high of $237.37 during trading. IBM has a market cap of US$214.40 billion.