Traders Sell IBM (IBM) Amid Q3 Beat, Raised Guidance; Software Shows Strong Growth
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International Business Machines Corp. (NYSE: IBM) shares are down more than 3 percent Monday afternoon following third-quarter results which beat on both the top and bottom lines.
Revenue increased 7.8 percent from $24.271 billion during the same quarter last year to $26.157 billion. Net income ran 7 percent higher to $3.839 billion, or $3.19 per diluted share. Excluding certain items, earnings were a more robust $3.28 per share.
Analysts on the Street were looking for revenue of $26.25 billion and earnings of $3.22 per share.
The biggest revenue growth driver was Asia/Pacific, which saw a 10 percent increase in revenue to $6.5 billion. Adjusting for foreign exchange, revenue grew just 1 percent in the quarter. The Americas came in with a 6 percent increase in revs to $10.9 billion. Sales in growth markets rose 19 percent, or 13 percent adjusting for currency.
Service revs rose 2 percent (adjusted) to an aggregate $15.1 billion, while Software revs increased 8 percent (adjusted) to $5.8 billion. Hardware nudged 1 percent higher to $4.5 billion.
Operating (non-GAAP) net income margin increased 0.2 points to 15.1 percent.
"Growth markets delivered outstanding revenue performance across software, hardware, and services and contributed to the company's expanded margins," commented CEO Sam Palmisano. "We also achieved strong results in Smarter Planet, business analytics and cloud."
Looking ahead, IBM raised fiscal 2011 earnings expectations from at least $13.25 per share to at least $13.35 per share, versus the consensus of $13.31 per share.
Revenue increased 7.8 percent from $24.271 billion during the same quarter last year to $26.157 billion. Net income ran 7 percent higher to $3.839 billion, or $3.19 per diluted share. Excluding certain items, earnings were a more robust $3.28 per share.
Analysts on the Street were looking for revenue of $26.25 billion and earnings of $3.22 per share.
The biggest revenue growth driver was Asia/Pacific, which saw a 10 percent increase in revenue to $6.5 billion. Adjusting for foreign exchange, revenue grew just 1 percent in the quarter. The Americas came in with a 6 percent increase in revs to $10.9 billion. Sales in growth markets rose 19 percent, or 13 percent adjusting for currency.
Service revs rose 2 percent (adjusted) to an aggregate $15.1 billion, while Software revs increased 8 percent (adjusted) to $5.8 billion. Hardware nudged 1 percent higher to $4.5 billion.
Operating (non-GAAP) net income margin increased 0.2 points to 15.1 percent.
"Growth markets delivered outstanding revenue performance across software, hardware, and services and contributed to the company's expanded margins," commented CEO Sam Palmisano. "We also achieved strong results in Smarter Planet, business analytics and cloud."
Looking ahead, IBM raised fiscal 2011 earnings expectations from at least $13.25 per share to at least $13.35 per share, versus the consensus of $13.31 per share.
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