Arvind Krishna, Chairman, President and CEO of IBM, attends the 55th World Economic Forum Annual Meeting in Davos, Switzerland on January 22, 2025.
Eve Herman | Reuters
IBM reported third-quarter results that beat Wall Street expectations and raised guidance, citing continued artificial intelligence tailwinds. Still, the stock fell 5% in extended trading.
Here’s how the company performed compared to LSEG estimates:
Earnings per share: $2.65 adjusted vs. $2.45 expected Revenue: $16.33 billion vs. $16.09 billion expected.
IBM said revenue was up 9% from about $15 billion in the same period last year. The company had net income of $1.74 billion, or $1.84 per share, compared with a loss of $330 million, or 36 cents per share, in the same period last year. Last year’s results included the impact of $2.7 billion in pension settlement costs.
“Clients around the world continue to leverage our technology and domain expertise to improve operational productivity and deliver real business value through AI,” CEO Arvind Krishna said in the release.
IBM has revised its revenue outlook upward, saying it expects sales growth of “at least” 5% to “more than 5%.” Free cash flow for the current fiscal year is expected to reach $14 billion, up from the $13.5 billion expected in the previous quarter.
Krishna also said the company’s AI book of business exceeded $9.5 million, up from $7.5 billion in the second quarter.
Like many technology companies, IBM has leveraged AI to streamline productivity and reduce costs. In May, Mr. Krishna told the Wall Street Journal that he had replaced 200 human resources positions.
IBM’s software revenue rose 10% to $7.21 billion, meeting StreetAccount forecasts. Consulting revenue totaled $5.3 billion, exceeding expectations of $5.24 billion.
Infrastructure, which includes mainframe computing, grew 17% to $3.6 billion.
IBM’s board of directors also approved a quarterly dividend of $1.68 per share.
