IBM’s quarterly revenue rose 0.3% to $17.6 billion, compared to $17.5 billion in the same period of 2020, but missed analysts' estimates of $17.8 billion. The company reported net income of $1.13 billion compared with $1.7 billion in the. same period a year ago with adjusted earnings of $2.52 a share compared with $2.58 in 2020.
Revenue rose 2.5%, normalized to exclude the company's Kyndryl managed infrastructure services division, which is set to be spun off Nov. 3.
Shares of IBM on Wednesday declined by 4.7% to $135.25 in after hours trading. The stock closed down 0.06% to $141.90 in the regular session.
“With the separation of Kyndryl early next month, IBM takes the next step in our evolution as a platform-centric hybrid cloud and AI company," Arvind Krishna, IBM chairman and chief executive officer, said in a Wednesday statement. "We continue to make progress in our software and consulting businesses, which represent our higher growth opportunities.
"With our increased focus and agility to better serve clients, we are confident in achieving our medium-term objectives of mid-single digit revenue growth and strong free cash flow generation,” Krishna said.
IBM had some positive results as revenues from its cloud and cognitive software segment --which includes cloud and data platforms -- rose 2.5% to $5.7 billion, and its global business services revenue -- including consulting and application management -- increased 11.6% to $4.4 billion.
However, revenues for global technology services, which includes technology support services, declined 4.8% to $6.2 billion; systems, which includes systems hardware and operating systems software, reported revenue of $1.1 billion, down 11.9%; and global financing revenues declined 19.2% to $220 million.
Analysts expected IBM’s third-quarter results would likely reflect continued adoption of its hybrid cloud computing capabilities, mobile, analytics, cognitive technologies and artificial intelligence-related solutions, according to Zacks Equity Research.
IBM in the third quarter launched its new IBM Power E1080 server, the first based on the new IBM Power10 processor, designed specifically for hybrid cloud environments.
IBM in early October informed its U.S. workers that they must receive COVID-19 vaccinations by Dec. 8, or they will suffer an unpaid suspension.