IBM Q3 Earnings Disappoint... Revenue Growth Only 0.3%

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Byunghee Park] Bloomberg reported on the 20th (local time) that IBM's third-quarter revenue fell short of expectations.

IBM announced third-quarter revenue of $17.6 billion, a 0.3% increase compared to the same period last year. The analyst consensus compiled by Bloomberg was $17.8 billion.

Adjusted earnings per share, excluding certain costs, also recorded $2.52, falling short of the Bloomberg analyst consensus of $2.53.

The Global Technology Services (GTS) segment, which accounts for about one-third of IBM's revenue, declined by 4.8%, weighing on overall revenue. IBM plans to spin off most of the GTS business into a separate company named "Kyndryl" on the 3rd of next month. IBM explained that excluding the Kyndryl division, third-quarter revenue growth was 2.5%.

Instead, IBM is focusing on expanding its cloud services and artificial intelligence (AI) business. In October 2018, it acquired cloud software company Red Hat for $33.4 billion.

Revenue from the cloud and cognitive software division increased by 2.5%. Over the past year, cloud division revenue grew by 14% to $27.8 billion. During the same period, Red Hat's revenue growth rate was 17%.

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