International Business Machines Corp.’s stock rose 2% in the extended session Wednesday after the company notched a large profit beat and called out growing adoption of its artificial-intelligence offerings.
The company logged third-quarter net income of $1.7 billion, or $1.84 a share, whereas IBM recorded a net loss of $3.2 billion, or $3.54 a share, in the year-earlier period. On an adjusted basis, IBM
IBM,
earned $2.20 a share from continuing operations, beating the FactSet consensus, which was for $2.12 a share.
Revenue grew to $14.8 billion from $14.1 billion, while analysts were modeling $14.7 billion. The company saw an 8% increase in software revenue, 6% growth in consulting revenue, and a 2% drop in infrastructure revenue.
“Clients are increasingly adopting our watsonx AI and data platform along with our hybrid cloud solutions to unlock productivity and operational efficiency,” Chief Executive Arvind Krishna said in a release. “This is helping drive solid growth in our software and consulting businesses. As a result, we remain confident in our revenue and free cash flow growth expectations for the full year.”
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IBM posted 9% growth in Red Hat revenue within its software business, and the company noted that revenue from data and AI increased 6% in that segment.
For the full year, IBM still anticipates 3% to 5% growth in revenue on a constant-currency basis. The company is also looking for about $10.5 billion in free cash flow, consistent with its prior forecast.
IBM generated $1.7 billion in free cash flow during the third quarter.
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