IBM (IBM) Tops Q3 EPS by 4c; Updates FY15 EPS Outlook

IBM (NYSE: IBM) reported Q3 EPS of $3.34, $0.04 better than the analyst estimate of $3.30. Revenue for the quarter came in at $19.28 billion versus the consensus estimate of $19.62 billion.

"In the third quarter we again made progress in the transformation of our business to higher value, with strong growth in our strategic imperatives and expanded operating margins,” said Ginni Rometty, IBM chairman, president and chief executive officer. "We are continuing to make significant investments to build platforms around analytics, cloud, mobility and security that lay the foundation for a new era of cognitive business -- where we see long-term value for our clients and shareholders."

Strategic Imperatives

Revenues from the company’s strategic imperatives --- cloud, analytics, and engagement --- increased 17 percent year-to-year (up 27 percent adjusting for currency and the divested System x business); increased 20 percent year-to-date (up more than 30 percent adjusting for currency and the divested System x business). Total cloud revenues (public, private and hybrid) increased more than 45 percent (more than 65 percent adjusting for currency and the divested System x business) year-to-date, and is $9.4 billion over trailing 12 months. The annual run rate for cloud delivered as a service -- a subset of the total cloud revenue -- increased to $4.5 billion from $3.1 billion in the third quarter of 2014. Revenues from business analytics increased 9 percent year-to-date (19 percent adjusting for currency). Revenues year-to-date from mobile more than quadrupled, from security increased 6 percent (12 percent adjusting for currency) and from social increased 32 percent (about 40 percent adjusting for currency).

Guidance:

IBM sees FY2015 EPS of $14.75 - $15.75, versus the consensus of $15.68. The company was previously looking for FY15 EPS of $15.75 - $16.50.

For earnings history and earnings-related data on IBM (IBM) click here.

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