Copyright Investor's Business Daily
IBM (IBM) stock slipped late Wednesday despite the tech giant reported third-quarter results that bested expectations. IBM also slightly boosted its sales forecast for the rest of the year. The Armonk, N.Y.-based IBM said that it earned an adjusted $2.65 per share for the September-ended quarter, up 15% from a year earlier. That beat the $2.45 per share that analysts polled by FactSet were forecasting. Sales increased 9% $16.3 billion compared to analyst estimates of $16.1 billion. Software revenue grew 10% to $7.21 billion, according to IBM. That was roughly in line with analysts expectations, according to FactSet. "Our AI book of business now stands at more than $9.5 billion," IBM Chief Executive Arvind Krishna said in a news release. "Given the strength of our business, we are raising our full-year outlook for revenue growth and free cash flow." IBM now expects revenue growth of more than 5% for the full year, compared to a previous language in its prior Q2 results projecting "revenue growth of at least 5%." Further, IBM said it expects free-cash-flow of about $14 billion for the full-year, compared to a previous forecast of $13.5 billion. On the stock market today, IBM stock fell nearly 5% to 274 in after-hours trading. More earnings coverage to come. IBM Stock Up 30% This Year Prior to earnings, IBM gained 2.2% in Wednesday regular trading. Shares have gained 33% year-to-date. In general, investors have been positive about IBM's ability to harness it expertise in AI to drive new growth, especially in its software segment. But IBM slumped in July after its Q2 results, which showed slower than expected sales growth for its software segment. Shares broke out briefly above a 296.16 cup pattern buy point on Oct. 7 to reached a record 301.04, according to MarketSurge. That was after news that IBM will partner with Anthropic to advance the use of AI agent by businesses. The stock has pulled back since, finding support just above its 21-day moving average. IBM — one of 30 stocks that make up the Dow Jones Industrial Average — has easily outperformed the S&P 500. But its Relative Strength rating has slipped to 71 out of a best-possible 99. The stock had a score of 85 three months ago. Coming into the report, IBM stock had an IBD Composite Rating of 84 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better. YOU MAY ALSO LIKE: Meta Stock Took A Hit After Red-Hot Run. Why These Analysts Remain Bullish. Top Growth Stocks To Buy And Watch Learn How To Time The Market With IBD's ETF Market Strategy Find The Best Long-Term Investments With IBD Long-Term Leaders
