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IBM
shares, however, fell 3% after the company stayed away from
issuing a forecast for the current quarter, citing uncertainty
around a global economic recovery due to the COVID-19 pandemic.
"Clients' near-term priorities continue to include operational
stability, flexibility and cash preservation, which tends to
favor (operating expenses) over (capital expenses)," Chief
Financial Officer James Kavanaugh said.
"This is resulting in some project delays and purchase
deferrals."
Revenue from the cloud business, previously headed by Chief
Executive Officer Arvind Krishna, rose 19% to $6 billion in the
third quarter, offsetting weakness in much of its other
businesses.
The boost from the cloud business further underscores IBM's move
to focus on its high-margin open hybrid cloud and AI solutions,
which together account for more than half of its recurring
revenue, by spinning off its IT infrastructure services unit.
"Clients continue to balance short-term challenges and
opportunities for transformation ... More of my conversations
with CEOs are around how they become digital businesses,"
Krishna said on a post-earnings call.
IBM's total revenue fell 2.6% to $17.56 billion in the reported
quarter, but was slightly above analysts' estimates of $17.54
billion, according to IBES data from Refinitiv.
Excluding the impact from currency and business divestitures,
sales declined 3.1%.
The global technology services segment, IBM's biggest unit that
caters to some of the world's largest data centers, reported a
4% drop in revenue to $6.5 billion.
Excluding items, the company earned $2.58 per share, which was
in line with analysts' estimates.
(Reporting by Munsif Vengattil in Bengaluru; Editing by Anil
D'Silva)
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