Why IBM Stock Is Trading Higher Thursday

International Business Machines Corp IBM shares are rising Thursday after the company reported better-than-expected financial results. Here's a look at what you need to know.

• Q3 Revenue: $14.8 billion versus estimates of $14.73 billion
• Q3 EPS: $2.20 versus estimates of $2.13

Software revenue was up 8% year-over-year and consulting revenue was up 6%, while infrastructure revenue decreased 2%. 

Cash flow from operations totaled $3.1 billion in the third quarter. Free cash flow came in at $1.7 billion. IBM ended the quarter with $11 billion in cash and marketable securities.

"Clients are increasingly adopting our watsonx AI and data platform along with our hybrid cloud solutions to unlock productivity and operational efficiency," said Arvind Krishna, chairman and CEO of IBM.

"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." 

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Guidance: IBM said it continues to expect constant currency revenue growth of 3% to 5% for the full-year 2023. The company anticipates a full-year free cash flow of approximately $10.5 billion.

Analyst Changes: Following the print, Wedbush analyst Moshe Katri reiterated IBM with a Neutral rating and maintained a price target of $140. BMO Capital analyst Keith Bachman maintained IBM with a Market Perform rating and raised the price target from $152 to $155.

IBM Price Action: IBM shares were up 4.87% at $143.75 at the time of writing, according to Benzinga Pro.

Photo: courtesy of IBM.