International Business Machines (IBM) shares traded sharply lower Thursday, after the group posted weaker-than-expected third quarter revenue.
IBM’s non-GAAP earnings for the three months ending in September declined -21.6% to $2.68 per share, a penny ahead of the Street consensus forecast.
But total revenues fell -3.9% to $18 billion, which was lower than analysts' forecasts of $18.29 billion.
CFO James Kavanaugh mentioned lower customer business volumes in certain markets and some multi-national clients, compared to expectations.
Nevertheless, IBM's cloud and cognitive software business, in which it has incorporated Red Hat, experienced a +6.4% rise in revenue to $5.28 billion. The company’s cloud services revenues rose +11% to $5 billion.
But the company's largest segment, global technology services, saw revenues decline -5.6% to $6.7 billion.
For the full-year, IBM expects non-GAAP earnings of around $12.80 per share, a figure that is in line with its updated guidance from early August. The company re-iterated its free cash flow forecast of around $12 billion.