IBM takes hit after Q3 earnings

International Business Machines Corporation (NYSE: IBM) fell without a parachute Wednesday, after the company known as “Big Blue” reported upbeat earnings for its third quarter, while sales missed estimates. The company reaffirmed FY18 guidance.

On Tuesday, IBM revealed GAAP Earnings per Share from continuing operations of $2.94; Operating (non-GAAP) EPS of $3.42. Revenue was $18.8 billion, down 2%. Cloud revenue of $19.0 billion over last 12 months, up 20%.

In the third quarter, the company generated net cash from operating activities of $4.2 billion, or $3.1 billion, excluding Global Financing receivables. IBM’s free cash flow was $2.2 billion. IBM returned $2.1 billion to shareholders through $1.4 billion in dividends and $0.6 billion in gross share repurchases.

At the end of September 2018, IBM had $1.4 billion remaining in the current share repurchase authorization.

IBM ended the third quarter with $14.7 billion of cash on hand. Debt totaled $46.9 billion, including Global Financing debt of $30.4 billion. The balance sheet remains strong and is well positioned for the long term.

According to CEO Ginni Rometty, "IBM's progress and momentum this year in the emerging, high-value segments of the IT industry are driven by our innovative technology, deep industry expertise and commitment to trust and security.

"Our leadership in the technology and services that deliver hybrid cloud, AI, blockchain, analytics and security has helped drive our overall performance, and is helping our clients unleash the full business value of these innovations.

Shares collapsed $9.92, or $6.84, early Wednesday to $135.20