IBM (IBM) reported third-quarter results late Wednesday that fell slightly short on revenue estimates but met expectations on earnings. IBM stock fell.
The company reported adjusted earnings of $2.52 a share on revenue of $17.6 billion. Analysts expected IBM to report adjusted earnings of $2.52 a share on revenue of $17.7 billion, according to FactSet. Revenue edged up 2.5% from the year-ago period.
IBM stock dropped 4.9%, near 135, during after-hours trading on the stock market today.
The company did not provide guidance.
Earlier this month IBM approved the separation of its $19 billion managed infrastructure services business, which is currently part of the Global Technology Services segment, into a new public company, Kyndryl, effective Nov. 3. That will allow IBM to focus more on cloud computing and artificial intelligence.
IBM Stock: Business Shifts Hamper Growth
IBM is undergoing a big transition that focuses on an open, hybrid cloud platform and artificial intelligence technology. Total cloud revenue over the last 12 months reached $27.8 billion, up 14% from the comparable period a year ago.
The major shifts in business operations at IBM help to explain why growth in revenue and earnings has been a struggle. Over the past decade, IBM has invested more than $120 billion in remaking the company.
“With our increased focus and agility to better serve clients, we are confident in achieving our medium-term objectives of mid-single-digit revenue growth and strong free cash flow generation,” said CEO Arvind Krishna, in written remarks with the IBM earnings release.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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