IBM raised its full-year outlook and reported higher-than-expected quarterly profit as its growing focus on higher-margin software and services helped it cope with weak technology spending.
International Business Machines Corp still failed to satisfy investors, whose expectations had risen along with a 24 per cent rise in the shares over the past three months. A drop in service contract numbers, an indication of future sales, also worried Wall Street.
Indeed, IBM reported third-quarter net profit rose to $3.2 billion, or $2.40 a share, from $2.8 billion, or $2.04 a share, a year earlier.
Revenue fell 7 per cent from a year earlier to $23.6 billion, but it rose 1 per cent from the previous quarter and was better than Wall Street’s forecast of $23.4 billion. IBM forecast a return to revenue growth in the fourth quarter.