IBM stock sinks 3% after hours after missing Wall Street expectations on revenue

IBM stock slid 3% after hours on Tuesday, when it reported revenue that fell short of Wall Street expectations.

This past quarter, IBM reported a revenue of $US18.2 billion, down 4.7% from this time last year. It marks IBM’s third straight quarter of declining revenue. However, IBM also posted better-than-expected earnings of $US2.25 per share.

IBM CEO Ginny Rometty said in a statement that the company’s cloud revenue growth accelerated in Q1, with strong performance in “high value” areas like cognitive software and consulting

“IBM’s investments in innovative technologies coupled with our industry expertise and our commitment to trust and security position us well to help clients move to chapter two of their digital reinvention,” Rometty said in a statement.

Here’s what IBM reported:

  • Revenue: $US18.18 billion, versus analyst expectations of $US18.51 billion, according to analyst expectations.
  • EPS (adjusted): $US2.25, versus $US2.22 expected by analysts.

IBM’s cloud unit saw stronger growth, generating a revenue of $US19.5 billion. This was up 10% from this time last year.

IBM shares have increased 27% so far this year, as the company continues to sell off or otherwise shed underperforming businesses. But there are big questions about its planned $US34 billion acquisition of Red Hat.

Earlier this year, IBM announced that in 2018, it had annual revenue growth for the first time since 2011.

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