The AI house of cards is already collapsing. Hope everyone sold their shares before this announcement.
https://www.barrons.com/articles/ibm-earnings-stock-price-da520f61
IBM beat earnings estimates in its latest quarter. but its 1% revenue gain missed analysts’ forecast.
By: Adam Levine
Oct. 23, 2024 4:15 pm ET
IBM reported mixed quarterly results after markets closed on Wednesday. Its shares were falling sharply in after-hours trading.
For its third quarter, IBM reported adjusted earnings per share of $2.30 versus Wall Street’s consensus estimate of $2.22, according to FactSet. Adjusted earnings were up 5% from the same quarter last year.
Revenue for the quarter was $15.0 billion, just below analysts’ expectations for $15.1 billion. Revenue was up 1% from a year ago, below the company’s long-term target for mid-single digit growth.
Shares of IBM have rallied this year, with investors growing more optimistic about the company’s artificial intelligence efforts. The latest results could suggest its AI efforts are still taking time to come together.
“We continue to see great momentum in AI as our models are trusted, fit-for-purpose, and lower cost, with performance leadership,” said Arvind Krishna, IBM’s chairman and CEO.
IBM’s software segment drove results, up 10% on the year. The business carries relatively high margins that supported earnings growth.
“Software overall delivered a very strong quarter, very strong pervasive growth,” Chief Financial Officer Jim Kavanaugh told Barron’s. “So it’s good underpinnings, and it was the growth profile driver.”
Free cash flow rose 23% from a year ago; year to date, it’s up 29%. Investors monitor the metric closely since it drives dividend growth.
IBM’s forecast implied that revenue growth would be 1% to 2% in the fourth quarter. It sees free cash flow growth of at least 7% for 2024.
IBM stock was down 7% in after-hours trading following the earnings release. The stock is up over 70% in the last 12 months.