=IBM (IBM) reported earnings on Tue 16 Oct 2018 (a/h)

IBM beats by $0.02, misses on revs; reaffirms FY18 EPS guidance 

• Reports Q3 (Sep) earnings of $3.42 per share, $0.02 better thanthe S&P Capital IQ Consensus of $3.40; revenues fell 2.1% year/year to $18.76 bln vs the $19.04 bln S&P Capital IQ Consensus.
• Total gross profit margins were flat y/y a 46.9%.
• Cognitive Solutions(includes solutions software and transaction processing software) -- revenues of $4.1 billion, down 6 percent (down 5 percent adjusting for currency), with growth in Watson health, security solutions, and key strategic areas in analytics. Global Business Services(includes consulting, application management and global process services) -- revenues of $4.1 billion, up 1 percent (up 3 percent adjusting for currency), led by consulting. Gross profit margin increased 270 basis points. Technology Services & Cloud Platforms (includes infrastructure services, technical support services and integration software) -- revenues of $8.3 billion, down 2 percent (flat year to year adjusting for currency), with growth in cloud revenue. Gross profit margin increased 120 basis points. Systems (includes systems hardware and operating systems software) -- revenues of $1.7 billion, up 1 percent (up 2 percent adjusting for currency), driven by growth in Power and IBM Z. Global Financing (includes financing and used equipment sales) -- revenues of $388 million, down 9 percent (down 7 percent adjusting for currency).
• Co reaffirms guidance for FY18, sees EPS of at least $13.80, excluding non-recurring items, vs. $13.81 S&P Capital IQ Consensus. IBM expects free cash flow of approximately $12 billion, with a realization rate greater than 100 percent.