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KEY TAKEAWAYS
- IBM shares are dropping 5% in premarket trading Thursday, weighing on Dow Jones Industrial Average futures, after its quarterly revenue fell short of Wall Street estimates.
- The company reported third-quarter revenue of $14.97 billion, lower than the $15.07 billion consensus estimate of analysts polled by Visible Alpha, as infrastructure revenue fell 7% and consulting revenue remained flat.
- IBM CEO Arvind Krishna said the group expects fourth-quarter revenue growth, in constant-currency terms, to be “consistent” with the third quarter, driven by strong software sales.
IBM (IBM) shares are dropping 5% in premarket trading Thursday, weighing on Dow Jones Industrial Average futures, after its quarterly revenue fell short of Wall Street estimates.
The company reported third-quarter revenue of $14.97 billion, up 1% year-over-year and 2% in constant-currency terms but lower than the $15.07 billion consensus estimate of analysts polled by Visible Alpha. Infrastructure revenue fell 7% and consulting revenue remained flat.
IBM posted net loss of $330 million, or $0.36 per share, due to a $2.7 billion pension-settlement charge. Analysts expected a profit of $1.72 billion, or $1.84 per share.
Q4 Revenue Growth Seen ‘Consistent’ With Q3
IBM Chief Executive Officer (CEO) Arvind Krishna said the group expects fourth-quarter revenue growth, in constant-currency terms, to be “consistent” with the third quarter, driven by strong software sales.
Krishna said the firm’s “AI book of business now stands at more than $3 billion, up more than $1 billion quarter to quarter.”
Even after falling early Thursday, IBM shares are up more than 35% this year.