IBM reported third quarter results in line with the expectations outlined when it announced plans to spin off its managed infrastructure services unit[1]. The company saw strength in its Red Hat unit.
IBM reported third quarter results[2] in line with the expectations outlined when it announced plans to spin off its managed infrastructure services unit. The company saw strength in its Red Hat unit.
The company reported non-GAAP third quarter earnings of $2.58 a share on revenue of $17.6 billion. Wall Street was expecting IBM to report third quarter revenue of $17.54 billion with non-GAAP earnings of $2.58 a share. Net earnings per share from continuing operations were $1.89. IBM's third quarter revenue was down 2.65% and down 3.1% adjusting for divested businesses adn currency.
The results come shortly after announcing a strategy that will increase its focus on its hybrid cloud business. That move, part of CEO Arvind Krishna's plan to focus on higher-margin businesses like AI[3] and cloud[4], overshadowed IBM's quarter.
By division for the third quarter:
- The cloud and cognitive software unit, which includes Red Hat, cognitive applications and transaction processing platforms, had revenue of $5.6 billion, up 7%. Cloud and data platforms revenue was up 20% led by Red Hat. Cognitive applications were up 1% and cloud sales were up more than 60%.
- Global business services, which includes consulting, application management and global process services, had revenue of $4 billion, down 5%.
- Global technology services had revenue of $6.5 billion, down 4%.
- Systems revenue was $1.3 billion, down 15%, due to declines in IBM Z and storage systems.