IBM Earnings Just Can’t Cut It

International Business Machines Corp. (NYSE: IBM | IBM Price Prediction) reported third-quarter financial results after markets closed Monday. The company said that it had $2.58 in earnings per share (EPS) and $17.6 billion in revenue, versus analysts’ calls for $2.58 in EPS and $17.54 billion in revenue. The same period from last year had $2.68 in EPS and $18.03 billion in revenue.

In terms of its segments, the company reported:

• Cloud & Cognitive Software revenues increased 7% to $5.6 billion, up 6% in constant currency. Cloud & Data Platforms increased by 20% led by Red Hat.
• Global Business Services revenues decreased 5% to $4.0 billion, or 6% in constant currency.
• Global Technology Services revenues decreased 4% to $6.5 billion, Cloud revenue was up 9%.
• Systems revenues decreased 15% to $1.3 billion, or 16% in constant currency.
• Global Financing revenues decreased 20% to $273 million.

In the third quarter, the company generated net cash from operating activities of $4.3 billion, free cash flow was $1.1 billion. The company returned $1.5 billion to shareholders in dividends.

On the books, the company ended the quarter with $15.75 billion in cash, cash equivalents, and marketable securities, an increase of $6.74 billion from the end of 2019.

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IBM previously pulled guidance earlier this year due to coronavirus uncertainty. The company also neglected to introduce any new guidance or comment on the way forward regarding COVID-19. However, analysts are calling for $4.45 in EPS and $20.79 billion in revenue for the fourth quarter.

IBM stock closed Monday at $125.52, with a 52-week range of $90.56 to $158.75. The consensus analyst price target is $136.87. Following the release, the stock was last seen down about 1% at $124.14 in the after-hours session.

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