IBM’s shift to newer businesses such as cloud and security services helped it beat analysts’ quarterly revenue estimates, and the technology major hinted at sales growth after nearly six years of declines.
IBM has been focusing on cloud, cybersecurity and data analytics, or what the company calls its “strategic imperatives”, to counter a slowdown in its legacy hardware and software businesses.
Revenue from these businesses climbed 11 per cent to $8.8bn (£6.6bn) in the third quarter ended 30 September, accounting for about 46 per cent of the company’s total revenue.
Management is focused in the right areas, but still have some work and must demonstrate this growth is sustainable,” said Josh Olson, an analyst at Edward Jones.
Revenue from the cognitive solutions business, which includes the AI-powered supercomputer Watson, rose nearly 4 per cent to $4.40bn, after falling 2.5 per cent in the previous quarter.
Analysts on average expected revenue of $4.17bn, according to financial data and analytics firm FactSet.
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