IBM rises after beating profit expectations and reaffirming full-year outlook

Investing.com -- International Business Machines (NYSE:IBM) shares were rising after beating expectations on profit for the third quarter and reaffirming its outlook.

The tech company reported adjusted earnings per share of $2.20 on revenue of $14.75 billion. Analysts expected adjusted earnings of $2.12 a share on revenue of $14.73 billion.

Shares rose 1.9% in after-hours trading. They are down 2.7% so far this year.

Software revenue, which includes its artificial intelligence platform, rose 8%, consulting revenue rose 6%, and infrastructure revenue fell 2%. "Clients are increasingly adopting our watsonx AI and data platform along with our hybrid cloud solutions to unlock productivity and operational efficiency," said CEO Arvind Krishna in a statement. "This is helping drive solid growth in our software and consulting businesses. As a result, we remain confident in our revenue and free cash flow growth expectations for the full year." 

IBM reaffirmed its outlook for revenue growth of 3% to 5% on a constant currency basis. It also reaffirmed its 2023 guidance for free cash flow at about $10.5 billion.

"Our continued focus on the fundamentals of our business is driving solid revenue growth, profit margin expansion, and strong cash generation," said James Kavanaugh, IBM's CFO, in the same statement. "That cash generation has enabled us to increase our investment in R&D and acquisitions, strengthening our future AI and hybrid cloud capabilities, while supporting continued shareholder returns through our dividend."