Cloud and security up significantly
IBM shares are up 4.08% aftermarket following Q3 results with revenue and EPS beats. The company forecasts FY17 diluted operating EPS of at least $13.80, compared to $13.75 consensus, with flat free cash flow on the year.
Cognitive Solutions (includes solutions software and transaction processing software) saw revenues of $4.4bn, up 4% (up 3% adjusting for currency), driven by solutions software, including security and analytics, and transaction processing software. Global Business Services (includes consulting, global process services and application management) -- revenues of $4.1bn, down 2%. Strategic imperatives revenue grew 10% led by the cloud practice.
Technology Services & Cloud Platforms (includes infrastructure services, technical support services and integration software) -- revenues of $8.5bn, down 3% (down 4% adjusting for currency). Strategic imperatives revenue grew 12%, driven by hybrid cloud services, security and mobile. Systems (includes systems hardware and operating systems software) -- revenues of $1.7bn, up 10%, driven by growth in z Systems and storage.
Global Financing (includes financing and used equipment sales) -- revenues of $427 million, up 4% (up 3% adjusting for currency)
"In the third quarter we achieved double-digit growth in our strategic imperatives, extended our enterprise cloud leadership, and expanded our cognitive solutions business," said Ginni Rometty, IBM chairman, president and chief executive officer.
Third-quarter cloud revenues increased 20% to $4.1bn. Cloud revenue over the last 12 months was $15.8bn, including $8.8bn delivered as-a-service and $7.0bn for hardware, software and services to enable IBM clients to implement comprehensive cloud solutions. The annual exit run rate for as-a-service revenue increased to $9.4bn from $7.5bn in the third quarter of 2016. In the quarter, revenues from analytics increased 5%. Revenues from mobile increased 7% and revenues from security increased 51% (up 49% adjusting for currency).