IBM misses expectations by a narrow margin – Q3 2021

International Business Machines Corporation reported its earnings for the quarter ending on September 2021 by Wednesday after the market close. The company reported earnings of $2.52 per share beating the estimates while revenue reported $17.62 billion missing the estimates by a narrow margin. The shares fell by 5% after announcing their results in the after-hours trading.

Highlights

  • Revenue of $17.6 billion, up 0.3 percent (down 0.2 percent adjusting for divested businesses and currency)
  • Cloud & Cognitive Software up 3 percent (up 2 percent adjusting for currency)
  • Global Business Services up 12 percent (up 11 percent adjusting for currency)
  • Revenue, up 2.5 percent (up 1.9 percent adjusting for divested businesses and currency), normalized to exclude Kyndryl to be separated in November
  • Net cash from operating activities of $16.1 billion and adjusted free cash flow of $11.1 billion, both up $0.3 billion over last 12 months
  • Total cloud revenue over last 12 months of $27.8 billion, up 14 percent (up 11 percent adjusting for divested businesses and currency)
  • Cloud & Cognitive Software cloud revenue up 31 percent (up 28 percent adjusting for currency)
  • Global Business Services cloud revenue up 30 percent (up 27 percent adjusting for currency)
  • Red Hat revenue up 17 percent, normalized for historical comparability
  • Debt reduced by $7.0 billion since year-end 2020

Here’s what analysts expect in line with estimates compiled by Refinitiv

Revenue: Revenue: $17.79 billion estimated  
Earnings: $2.50 per share expected   

Earnings History  

The computer pioneer beat the analyst’s estimates by an earning of $0.04 per share for the quarter ending Jun 2021. Wallstreet estimated an earning of $2.29 while the company reported $2.33 per share. They also forecasted the revenue to be $18.31 billion; however, the company announced $18.75. IBM’s quarterly growth spiked at 3.43% year on year.

Annual forecast

The company estimated its consensus earnings per share to be $10.68 and $11.83 for the fiscal year ending Dec 2021 and Dec 2022 respectively. For the same year, the revenues are estimated at $75.21 billion and $76.54 billion.

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