IBM shares slipped in extended trading after the company reported third-quarter adjusted earnings of $2.95 per share, above the $2.86 expected, and revenue of $17.10 billion versus $16.82 billion forecast. Revenue rose about 5% from a year earlier, and net income reached $2.19 billion, or $2.30 per share, compared with $1.84 per share a year ago. Software revenue grew 8% to $7.80 billion, beating estimates, while consulting was flat at $5.34 billion with its gross margin narrowing to 27.4% from 28.9%, and infrastructure rose 4% to $3.70 billion. AI accounts for about 30% of consulting revenue and 35% of backlog, and IBM still expects 2026 constant-currency revenue growth of 4% to 5% and free cash flow growth of more than $1 billion. CFO Jim Kavanaugh said he is comfortable with street estimates of about $32 billion in annual revenue.
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