International Business Machines Corp. (IBM) 3Q 2017 Earnings Send Shares Higher

International Business Machines Corp. (IBM) 3Q 2017 Earnings Send Shares Higher

IBM 3Q 2017 earnings were released after closing bell, and the company posted non-GAAP earnings of $3.30 per share on $19.2 billion in sales, compared to the consensus estimates of $3.28 per share in adjusted earnings on $18.57 billion in revenue. In the year-ago quarter, the company reported adjusted earnings of $3.29 per share on $19.23 billion in sales.

On a GAAP basis, IBM 3Q 2017 earnings fell 2% year over year to $2.92 per share. The company’s key focus segment is its Strategic Imperatives business, and the segment’s revenue rose 11% year over year to $8.8 billion. Over the trailing 12 months, Strategic Imperatives revenue has grown 10% to $34.9 billion, making up 45% of the company’s total revenue.

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Cloud revenues rose 20% year over year to $4.1 billion. IBM’s cloud as-a-service revenues had an annual exit run rate of $9.4 billion. Third-quarter analytics revenue increased 5%, while mobile revenues rose 7% and security revenues grew 51%.

IBM’s Cognitive Solutions revenues rose 4% year over year to $4.4 billion, while Global Business Services revenues fell 2% to $4.1 billion. Technology Services & Cloud Platforms revenues fell 3% to $8.5 billion, while Systems revenues grew 10% to $1.7 billion. Global Financing revenues rose 4% to $427 million.

“During the first three quarters of the year, our strong free cash flow has enabled us to maintain our R&D investments and to expand IBM’s cloud and cognitive capabilities through capital investments,” SVP and Chief Financial Officer Martin Schroeter said in a statement with the IBM 3Q 2017 earnings release. “In addition, we have returned nearly $8 billion to shareholders through dividends and share repurchases.”

For the full year, IBM still expects non-GAAP earnings of at least $13.80 per share and GAAP earnings of at least $11.95 per share. Analysts had been expecting IBM’s guidance for full-year earnings to be at $13.75 per share on an adjusted basis.

Following the IBM 3Q 2017 earnings release, the company’s stock surged in after-hours trades, climbing by as much as 3.59% to $151.80.

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