International Business Machines Corp (NYSE:IBM) saw its shares retreat after-hours in New York on Monday as the computing giant's third-quarter results just beat market estimates but the firm shied away from issuing a forecast for the current quarter.
'Big Blue' saw its third-quarter numbers boosted by higher demand for its cloud services - the unit it is staking its future on as it prepares to spin off one of its legacy units - with revenue from that business rising by 19% to $6 billion in the quarter, offsetting weakness in much of its other businesses.
IBM’s total revenue fell by 2.6% to $17.56 billion in the third quarter, which was slightly above analysts’ consensus estimates of $17.54 billion, according to IBES data from Refinitiv, and excluding the impact from currency and business divestitures, sales declined by 3.1%
The group's biggest unit, the global technology services segment that caters to some of the world’s largest data centers reported a 4% drop in revenue to $6.5 billion.
The company's quarterly earnings per share were $2.58, excluding one-off items, which was also in line with analysts’ estimates.
“Clients’ near-term priorities continue to include operational stability, flexibility and cash preservation, which tends to favor (operating expenses) over (capital expenses),” IBM's chief financial officer James Kavanaugh said in the results statement. “This is resulting in some project delays and purchase deferrals.”
IBM shares fell 3% in New York after-hours trading.