IBM stock rebounds on Q3 results, upbeat forecast

Shares of International Business Machines Corp. rose in extended trading on Wednesday, after the technology, consulting and infrastructure software giant reported better-than-expected third-quarter results and better-than-expected full-year revenue. .


earnings as Wall Street tries to gauge the impact of a tough foreign exchange environment and the state of business spending on technology services amid recession worries. But the company has profited from its hybrid cloud services, products such as its Red Hat open source software platform, consulting services, servers, and its zSystems software.

“Globally, customers see technology as an opportunity to enhance their business, which is evident in the results across our entire portfolio,” said CEO Arvind Krishna. know in a statement. He added that he now expects full-year sales growth “above our single-digit average model.”

That’s a little more optimistic than the forecast he made in the summer, when IBM report second quarter results. Krishna, at the time, said he continues to “expect full-year revenue growth at the high end of our single-digit average model.”

Wall Street expects IBM’s full-year revenue to reach $59.667 billion, according to FactSet. Analysts expect 2022 earnings per share of $9.28. IBM also said it continues to expect about $10 billion in consolidated free cash flow for the year.

For the third quarter, the company reported a net loss of $3.2 billion, or $3.54 per share, compared with a profit of $1.1 billion, or $1.25 per share. per share, during the same period of the previous year. On an adjusted basis, IBM earned $1.81 per share.

Revenue came in at $14.1 billion, up from $13.3 billion a year ago.

Analysts polled by FactSet expected adjusted earnings per share of $1.79, on revenue of $13.517 billion.

The company’s software revenue grew 7.5%. Consulting revenue grew 5.4%, while the company’s infrastructure segment grew 14.8%.

Shares were up 4.8% after hours on Wednesday.

Before the results were available, analysts were focused on the impact of a strong dollar and Morgan Stanley, in a recent note, describe as “wage pressures continue during the consultation.” IBM is also trying to focus more on cloud technology and AI, excluding some businesses in an attempt to narrow its focus.

Last year, in a move towards that goal, IBM spun off its infrastructure services business into Kyndryl Holdings.
But then, some analysts raised questions about IBM’s ability to increase sales and compete in the cloud services industry. Francisco Partners, an investment firm, also this year acquired healthcare data and analytics assets in IBM’s Watson Health segment.

In January, IBM declined to provide earnings per share forecast. The company also changed the way its businesses are organized earlier this year.

But during the spring, Krishna said that he had seen “strong maintenance needs“Even if economic growth falters or goes into a short recession, with the decision to stop doing business in Russia, following the invasion of Ukraine, is the only obstacle to the outcome.

So far, IBM stock is down 8%. For comparison, the S&P 500 index

22% decrease.


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