IBM (IBM) stock saw a decline late on Wednesday despite reporting better-than-expected third-quarter earnings. Although IBM’s revenue missed expectations, the company experienced strong growth in software sales, which was partially offset by weaknesses in consulting and infrastructure operations.
IBM reported adjusted earnings of $2.30 per share on sales of $14.97 billion for the quarter ending in September. Analysts had expected adjusted earnings of $2.22 per share on sales of $15.08 billion. In the same period a year ago, IBM had reported adjusted earnings of $2.20 per share on sales of $14.75 billion.
After-hours trading saw IBM stock drop by 3% to $225.85.
IBM’s potential in delivering generative AI tools to businesses has generated excitement, leading to a rally of over 70% in the company’s stock value over the past year. The company’s AI progress was highlighted in a news release, with CEO Arvind Krishna stating that the generative AI book of business now exceeds $3 billion, marking a significant increase quarter over quarter.
The third quarter was particularly strong for IBM’s software business, with sales growing by 9.7% year over year to $6.5 billion. This growth was supported by Red Hat, the cloud software firm acquired by IBM for $34 billion in 2019. Red Hat-related software sales grew by 14% year over year in the third quarter.
However, IBM’s revenue from consulting declined by 0.5% year over year to $5.2 billion, while sales from the infrastructure business dropped by 7% to $3 billion.
Looking ahead to the fourth quarter, IBM expects sales growth to be similar to the 1% growth seen in the third quarter. The company also maintained its forecast of $12 billion in free cash flow for the full year.
IBM stock closed regular trading at $232.75, surpassing a cup-with-handle buy point of $196.26. The company’s IBD Relative Strength Rating was at 91 out of a possible 99, indicating strong outperformance compared to other stocks over the past year.
In conclusion, despite a slight dip in stock value, IBM’s strong performance in software sales and AI progress indicate a positive outlook for the company’s future growth.
Translated text:
IBM (IBM)股票周三晚间出现下滑，尽管该公司报告的第三季度收益超出预期。尽管IBM的营收低于预期，但公司软件销售增长强劲，部分抵消了咨询和基础设施业务的弱点。
IBM报告称，截至9月的季度，调整后的每股收益为2.30美元，销售额为149.7亿美元。分析师预计调整后的每股收益为2.22美元，销售额为150.8亿美元。一年前的同期，IBM报告的调整后每股收益为2.20美元，销售额为147.5亿美元。
盘后交易中，IBM股价下跌3%至225.85美元。
IBM在将生成式AI工具交付给企业方面的潜力引发了人们的兴奋，导致公司股价在过去一年中上涨了70%以上。该公司的AI进展在一份新闻稿中得到了强调，首席执行官阿文德·克里希纳在书面声明中表示，生成式AI的业务现在已超过30亿美元，较上一季度增加了10亿美元以上。
第三季度对IBM的软件业务来说尤为强劲，销售额同比增长9.7%，达到65亿美元。这一增长得到了云软件公司Red Hat的支持，该公司于2019年以340亿美元收购。第三季度，Red Hat相关软件销售同比增长了14%。
然而，IBM的咨询业务收入同比下降0.5%，至52亿美元，基础设施业务销售额下降7%，至30亿美元。
展望第四季度，IBM预计销售增长率与第三季度的1%增长率相似。该公司还维持了全年120亿美元的自由现金流预测。
IBM股票的常规交易收盘价为232.75美元，超过了196.26美元的杯形手柄买入点。根据IBD相对强度评级，在过去一年中，该公司的IBD相对强度评级为91，表明IBM股票在过去一年中表现优异。
总的来说，尽管股价稍微下跌，但IBM在软件销售和AI进展方面的强劲表现表明公司未来增长前景积极。