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IBM stock falls after tech giant's earning's miss

IBM stock falls 6 percent in after-market trading. Although net income rose for the quarter, IBM stock took a hit because revenue fell $1 billion short of what analysts had been expecting.

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An IBM logo is displayed in Berlin, Vt., earlier this year. A 4 percent drop in revenue hurt IBM stock Wednesday, even though company revenues rose in the most recent quarter.

Toby Talbot/AP/File

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IBM said Wednesday that its third-quarter net income rose 6 percent, but its revenue fell and missed Wall Street's expectations by more than $1 billion. The company's stock fell in extended trading.

The Armonk, New York, computing company earned $4.04 billion, or $3.68 per share, up from $3.82 billion, or $3.33 per share, in the same quarter last year. Excluding one-time charges, the company earned $3.99 per share, above expectations of $3.96.

Revenue dropped 4 percent to $23.7 billion from $24.7 billion. That fell short of the $24.8 billion expected by analysts surveyed by FactSet. Adjusted for the effects of foreign currency exchange rates, the company said revenue fell 2 percent.

 

IBM is the world's largest technology-services company. Its results provide a gauge of businesses' appetite for technology spending. IBM has grown its earnings each quarter in the past decade, a streak that likely extended through the first quarter of this year.

The company's business has been stable because many of its customers sign long-term contracts that guarantee regular revenue, even when the economy is tough. It also helps that IBM no longer has a direct connection to the personal computer industry, where a sales slump has been hurting the makers of microprocessors and desktop and laptop computers.

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