The stock of IBM (IBM) is down 7% despite the technology company reporting financial results that beat Wall Street’s forecasts and raising its guidance.
The Armonk, New York-based company reported third-quarter earnings per share (EPS) of $2.65 U.S., which was ahead of the $2.45 U.S. expected among analysts.
Revenue in the period totaled $16.33 billion U.S., which topped the $16.09 billion U.S. that was forecast on Wall Street. Sales were up 9% from a year earlier.
Management at IBM cited artificial intelligence (A.I.) tailwinds as the main reason for its strong financial results.
IBM’s A.I. business surpassed $9.5 billion U.S. of revenue in the third quarter, up from $7.5 billion U.S. during the second quarter of this year.
IBM’s software revenue rose 10% to $7.21 billion U.S. in Q3, meeting Wall Street estimates. Consulting revenue totaled $5.3 billion U.S., surpassing a $5.24 billion U.S. forecast.
Infrastructure, which includes its mainframe computers business, saw revenue rise 17% year-over-year to $3.6 billion U.S.
The company also raised its guidance, saying that it now expects revenue to grow more than 5%, up from previous guidance that called for a maximum of 5% growth.
Free cash flow for the entire year is now forecast to reach $14 billion U.S., up from a $13.5 billion U.S. estimate previously.
IBM’s board of directors approved a $1.68 U.S. per share dividend for the current fourth quarter.
It’s not immediately clear why IBM’s stock is falling after its Q3 results. Before today (Oct. 23), IBM’s stock had gained 30% this year to trade at $287.51 U.S. per share.
