IBM Profit Down, But Tops View - Update

(RTTNews) - International Business Machines Corp. (IBM) Monday reported a drop in profit for the third quarter, as revenues continued to decline, hurt largely by sharp drop in hardware sales. Nevertheless, the company's quarterly earnings trumped Wall Street estimates as did revenues, reflecting strong performance of its cloud business.

Armonk, New York-based IBM's third-quarter profit dropped to $2.85 billion or $2.98 per share from $2.95 billion or $3.03 per share last year.

Excluding one-time items, earnings from continuing operations fell to $3.29 per share from $3.34 per share last year. Analysts had a consensus earnings estimate of $3.24 per share for the quarter.

IBM's third-quarter revenues dropped to $19.23 billion from $19.28 billion last year. This marks the 18th straight quarter the company has reported lower revenues. Analysts polled by Thomson Reuters expected revenues of $19.00 billion for the quarter.

IBM is divesting off its low-margin and unprofitable hardware businesses to improve profitability. The company is now striving hard to make IBM a company that provides cloud computing and data analytics.

Chief Executive Ginni Rometty said, ""IBM's third-quarter performance, led by continued double-digit growth in our strategic imperatives, is a testament to our leadership in cognitive solutions and cloud."

Looking forward to 2016, the company continues to expect adjusted earnings of at least $13.50 per share. Analysts currently estimate earnings of $13.51 per share.

IBM closed Monday's trading at $154.77, up $0.32 or 0.21%, on the NYSE. The stock, however dropped $4.27 or 2.76% in the after-hours trade.