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IBM Beats Earnings Estimates, Misses on Revenue (Update 1)

IBM CEO Sam Palmisano's statement has been added to this story, along with the company's updated share price.

ARMONK, N.Y. ( TheStreet) -- IBM (IBM - Get Report) missed Wall Street's revenue estimate in its third-quarter results, released after market close on Monday, although earnings beat analysts' expectations.

IBM reports its third-quarter results after market close.

The tech bellwether brought in revenue of $26.16 billion, up from $24.3 billion in the same period last year. Analysts surveyed by Thomson Reuters were looking for revenue of $26.25 billion.

Excluding items, IBM earned $3.28 a share, up from $2.85 in the prior year's quarter. Analysts had predicted earnings of $3.22.

"In the third quarter, we drove revenue growth, margin expansion and increased earnings as a result of our innovation-based strategy and continued investment in growth initiatives," explained Sam Palmisano, the IBM CEO, in a statement.

IBM's software business, in particular, continues to enjoy strong growth. The tech bellwether's software revenue grew 13% year over year (or 8% adjusted for the effects of currency) to $5.8 billion.

The company's services business also enjoyed a good quarter, with revenue growing 8% (or 2% adjusted for the impact of currency) year-over-year to reach $10.3 billion.

IBM's hardware business was less robust, with revenue from the company's System & Technology Group rising 4%, (or 1% adjusted for the effects of currency) to hit $4.5 billion.

Investors were less than impressed by IBM's revenue miss, pushing the company's stock down $6.15, or 3.3%, to $180.44 in extended trading.

-- Written by James Rogers in New York

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