International Business Machines Corp. (NYSE: IBM) reported its third-quarter financial results after the markets closed on Tuesday. This tech giant has been known for its declining revenues over the years, and many have even considered it a value trap, but that might be changing. Even though revenues continued to decline for this quarter, a positive outlook for the fourth quarter could signal a huge change within the company.

Big Blue posted $3.30 in earnings per share (EPS) and $19.15 billion in revenue. That compares with consensus estimates of $3.28 in EPS and revenue of $18.67 billion. The same period of last year reportedly had EPS of $3.29 and $19.23 billion in revenue.

In terms of its segments for the quarter, IBM reported as follows:

• Cognitive Solutions revenues totaled $4.4 billion, up 4% (up 3% adjusting for currency), driven by solutions software, including security and analytics, and transaction processing software.
• Global Business Services revenues were $4.1 billion, down 2%. Strategic imperatives revenue grew 10%, led by the cloud practice.
• Technology Services & Cloud Platforms revenues were $8.5 billion, down 3% (down 4% adjusting for currency). Strategic imperatives revenue grew 12%, driven by hybrid cloud services, security and mobile.
• Systems revenues were $1.7 billion, up 10%, driven by growth in z Systems and storage.
• Global Financing revenues totaled $427 million, up 4% (up 3% adjusting for currency).

Big Blue did not formally issue guidance for the fourth quarter, but management did mention that this coming quarter revenues should rise by about $2.8 billion, sequentially. Ultimately this implies that IBM would have revenues over $22 billion, compared with $21.77 billion in the fourth quarter from last year. Consensus estimates are calling for $5.15 in EPS and $21.8 billion in revenue for the current quarter.

Ginni Rometty, IBM’s board chair, president and CEO, commented:

In the third quarter we achieved double-digit growth in our strategic imperatives, extended our enterprise cloud leadership, and expanded our cognitive solutions business. There was enthusiastic adoption of IBM’s new z Systems mainframe, which delivers breakthrough security capabilities to our clients.

Shares of IBM were last seen up about 9% at $159.50, with a consensus analyst price target of $159.82 and a 52-week range of $139.13 to $182.79.

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