IBM share price slides on Q3 earnings disappointment as sales slump continues
The IT and consulting services company saw its shares slide in after hours trading, after its Q3 results failed to impress investors.
IBM shares are down 5% to $134 in after-hours trading after its Q3 results disappointed investors by revealing its prolonged sales slump has continued into the second-half of the year.
The IT and consulting services company published its latest set of results after the market closed on Wednesday, with revenues down for the firth consecutive quarter.
IBM sales miss the mark, but earnings edge out estimates
IBM saw its revenues miss analysts forecasts by $190 million, with total sales for the quarter coming in at $18 billion. However, its earnings per share narrowly beat analysts’ estimates by $0.02 at $2.68.
‘We continued our focus on the strength of our balance sheet in the third quarter,’ IBM CEO James Kavanaugh.
‘We generated $12.3 billion in free cash flow over the last 12 months and with our disciplined financial management we reduced debt by nearly $7 billion in the quarter, while maintaining a strong cash balance.’
IBM looks to revive growth with $32 billion Red Hat acquisition
IBM acquired open-source software company Red Hat in July for $34 billion – making it the largest deal in the company’s history.
The century-old IT firm is placing a major bet on hybrid cloud technology to reinvigorate growth and reverse declining sales.
‘This company has had to be reinvented many times,” IBM CEO Ginni Rometty told Bloomberg in September. ‘It’s something many other companies have yet to face.’
‘It is one thing to put out new products, but it is something else when the competitive landscape attacks your core business models and you have to develop a new one,’ she added.
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