IBM Q3 2020 profits

IBM Q3 2020 profits

Wired Senior Cade Metz author and Arvind Krishna, then senior vice president and director of IBM Research, speak on stage at the Wired Business Conference in New York on June 16, 2016.

Brian Ah | Wired Getty Images

IBM shares fell about 1% in extended trading on Monday as the company released third-quarter earnings that were in line with analysts’ expectations.

See how the company did it:

  • Profits: $ 2.58 per share, adjusted, compared to $ 2.58 per share, as expected by analysts, according to Refinitiv.
  • Income: $ 17.56 billion, compared to $ 17.54 billion, as expected by analysts, according to Refinitiv.

Revenue fell 2.5%, down for the third consecutive quarter on an annual basis, according to a statement. The revenue-cutting pattern under new CEO Arvind Krishna was often present during the tenure of his predecessor, Ginni Rometty. The coronavirus pandemic has caused IBM, among other companies, in part because of exposure to industries such as retail and transportation that the pandemic has disrupted.

Krishna announced a major change on October 8, saying that the infrastructure management services division of IBM Global Technology Services will become a stand-alone public company. At the time, IBM released preliminary results, stating that it expected $ 2.58 in adjusted earnings per share of $ 17.6 billion in revenue. During a teleconference conference with analysts on the day of the announcement, Krishna called on IBM to expect a “sustainable medium-term revenue growth in the medium term.”

In the third quarter, Global Technology Services, IBM’s largest segment, generated revenue of $ 6.46 billion. This is 4% lower year-on-year and higher than FactSet’s $ 6.25 billion consensus estimate.

Cloud and Cognitive Software, which includes Red Hat, generated $ 5.55 billion in revenue, an increase of 7% to over $ 5.48 billion.

Revenue from Global Business Services was $ 3.97 billion, down 5% and more than the $ 3.90 billion related revenue. Revenue from the systems was $ 1.26 billion, down 15% and below the $ 1.55 billion consensus.

The company’s free cash flow was $ 1.10 billion, under FactSet $ ​​2.26 billion and the lowest since the first quarter of 2001, according to FactSet.

IBM took its full time in April. The company did not issue any new guidance on Monday.

In the third quarter, IBM announced its acquisition WDG automation, a Brazilian software company.

Despite Monday’s move, IBM shares have fallen 6% since early 2020. The S&P 500 has risen about 6% over the same period.

Executives will discuss the results with analysts in a teleconference starting at 5 p.m. Eastern time.

This is new. Check again for updates.

I’M WATCHING: Full interview with IBM CEO Arvind Krishna and CEO Ginni Rometty

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