IBM Earnings: Here’s Why Shares Are Selling Off Over 3.5% Today

S&P 500 (NYSE:SPY) component International Business Machines Corporation (NYSE:IBM) reported its results for the third quarter. IBM creates integrated solutions that leverage information technology and a deep knowledge of business processes for clients.

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International Business Machines Corporation Earnings Cheat Sheet

Results: Net income for the computer-integrated systems fell to $3.82 billion ($3.33 per share) vs. $3.84 billion ($3.19 per share) a year earlier. This is a decline of 0.4% from the year-earlier quarter.

Revenue: Fell 5.4% to $24.75 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: International Business Machines Corporation fell short of the mean analyst estimate of $3.61 per share. It fell short of the average revenue estimate of $26.28 billion.

Quoting Management: “In the third quarter, we continued to drive margin, profit and earnings growth through our focus on higher-value businesses, strategic growth initiatives and productivity,” said Ginni Rometty, IBM chairman, president and chief executive officer.”

Key Stats:

Last quarter’s profit decrease ends a four-quarter streak of profit increases. In the second quarter, net income rose 5.9% from the year earlier, while the figure increased 7.1% in the first quarter, 4.4% in the fourth quarter of the last fiscal year and 7% in the third quarter of the last fiscal year.

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by 9 cents, and in the first quarter, it was ahead by 15 cents.

Revenue has declined for two quarters in a row. In the second quarter, revenue declined 3.3% to $25.78 billion from the year-earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from $5.18 a share to $5.27 over the last sixty days. The average estimate for the fiscal year is $15.13 per share, up from $15.01 seven days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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