IBM’s results for the third quarter were below analyst estimations, leading to shares falling five per cent. This Wednesday, the company’s Chief Financial Officer James Kavanaugh held a post-earnings call, in which he explained that the company experienced decreased business volumes around the sales of its global technology services.
As a result, the quarterly revenue missed the analysts’ mark, but Kavanaugh expects things to return to normal in the fourth quarter.
The UK and Germany were the two biggest markets where they felt lower volumes.
IBM’s cloud service revenue increased by 11 per cent, hitting $5 billion. That also means, according to Reuters, that the company beat profit expectations for the quarter.
In total, revenue fell to $18.03bn, which represents a 3.9 per cent fall. Analysts had estimated $18.22 billion. The revenue for the company’s global technology services unit hit $6.70bn, representing a 5.6 per cent drop.
Late last year, IBM acquired software firm Red Hat for $34 billion. Red Hat is a software company most known for being a distributor of a version of Linux, an open-source operating system that businesses usually use to run data centres.
Under the agreement, Red Hat will become part of IBM's Hybrid Cloud division. Its CEO, Jim Whitehurst, will join IBM's senior management team and will be reporting directly to company CEO Ginni Rometty.