IBM Earnings: Shares Tumble Despite Higher 3Q Profit

by Christopher Freeburn | October 17, 2013 9:28 am

IBM sign 630 300x233 IBM Earnings: Shares Tumble Despite Higher 3Q Profit[1]Technology and consulting giant IBM (IBM[2]) offered Wall Street a mixed bag with its latest quarterly results[3]. Investor weren’t happy with the numbers and the company’s shares plunged about 7% in Thursday morning trading.

Third quarter earnings climbed 6% from $3.82 billion last year, to $4.04 billion. Adjusted EPS came in at $3.99, which topped the $3.96 that analysts had forecast, the Associated Press notes.

The company reiterated its earlier forecast of annual adjusted profits of at least $16.90 a share, which is slightly higher than the $16.87-a-share consensus among analysts.

But the company missed on revenue, posting sales of $23.7 billion, down 4% from $24.7 billion during the same period last year, and below the $24.8 billion that Wall Street had expected.

Especially worrisome to investors was a steep drop in hardware sales[4], which plunged 17% during the quarter. IBM earnings from its equipment division have declined by $1 billion through the third quarter of this year, Reuters noted.

Last week IBM lost a court battle challenging a $600 million cloud computing contract[5] between the Central Intelligence Agency and Amazon (AMZN[6]).

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/10/IBM-sign-630.jpg
  2. IBM: http://studio-5.financialcontent.com/investplace/quote?Symbol=IBM
  3. with its latest quarterly results: http://www.usatoday.com/story/money/business/2013/10/16/ibm-earnings/2996205/
  4. was a steep drop in hardware sales: http://finance.yahoo.com/news/ibms-revenue-slump-stokes-growth-125942156.html
  5. challenging a $600 million cloud computing contract: http://investorplace.com/2013/10/amazon-wins-battle-build-600-million-cloud-cia-amzn-ibm-msft-ctxs-intc-hpq/
  6. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN

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