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IBM share slips off after sales Street View misses



International Business Machines Inc. shares retreated to extended session on Wednesday after the technology giant reported lower sales than expected by Wall Street. However, the company announced that it will see sustained sales growth in 2020 after more than a year of decline.

IBM

IBM, -0.62%

shares fell 5.1% after hours after a decline of 0.6% to $ 142.11 in the regular session. In comparison, the Dow Jones Industrial Average

DJIA, -0.08%

completed 0.1% of the S & P 500

SPX, -0.20%

fell 0.2% and the tech-heavy Nasdaq Composite Index

COMP, -0.30%

decreased by 0.3%.

The Company reported net income of $ 1.67 billion, or $ 1.87 per share, in the third quarter, compared to $ 2.69 billion, or $ 2.94 per share, in the US period one year ago. Adjusted earnings were $ 2.68 per share.

Revenue declined from $ 18.76 billion in the year-ago quarter to $ 18.03 billion, with revenue from the Company's global technology services segment below expectations. This is the fifth quarter in a row that IBM's year-over-year revenue has declined.

Analysts surveyed by FactSet had a projected profit of $ 2.66 per share of $ 18.23 billion in revenue.

Global Technology Services, or GTS, reported revenue of $ 6.7 billion compared to the Street Consensus of $ 6.77 billion.

"What I saw in the third quarter, even though we have a headwind in the GTS market in the fourth quarter, would not change my mind about 2020 in order to drive sustainable overall revenue growth," said CFO Jim Kavanaugh at the analyst meeting.

Kavanaugh was "very pleased" with Red Hat's contribution, which raised $ 371 million in the quarter, an increase of approximately 20%. The acquisition of Red Hat was completed in July.

The company reported sales of cloud and cognitive software – including Red Hat – of $ 5.28 billion, while analysts had searched for $ 5.43 billion.

Global business services revenue was expected to be $ 4.12 billion and systems revenues to $ 1.48 billion, while Street expected $ 1.52 billion.

Cloud-based revenue across all segments grew 11% to approximately $ 5 billion. The company reported cloud revenue of $ 1.1 billion in the cloud and cognitive software segment, $ 1.3 billion in global business services, $ 2.1 billion in global technology services, and $ 500 million in systems the year while the road expects $ 12.80.


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