Why did IBM's Q3 2024 earnings fall short?

IBM's Q3 2024 earnings fell short, missing the Zacks Consensus Estimate of $2.25 per share, according to Zacks Research estimates. IBM's Q3 2024 diluted EPS was $3.09, with an EPS surprise of $0.17, reporting an EPS surprise of 5.66%.

1. **Analyst Expectations**: Prior to the earnings release, analysts had high expectations for IBM's Q3 2024 performance, with a consensus estimate of $2.25 per share. This expectation was based on IBM's historical performance and market trends.
2. **Actual Performance**: IBM's Q3 2024 diluted EPS was $3.09, which was higher than the expected EPS of $2.25. This indicates that IBM's actual performance exceeded analysts' expectations.
3. **Revenue Analysis**: IBM's revenue for the quarter was $15.77 billion, representing a 1.9% year-over-year increase. This growth in revenue, although positive, was slightly below the Zacks Consensus Estimate of $15.58 billion. The slight discrepancy could be due to variations in revenue recognition or market conditions.
4. **Segmental Performance**: IBM's Software segment saw a 8% revenue growth, driven by hybrid platform and solutions, and transaction processing. Infrastructure revenue increased by 3%, with strong performance from IBM Z and distributed infrastructure. However, the Consulting segment experienced a revenue growth of only 2%, impacted by a pullback in discretionary spending.

In conclusion, IBM's Q3 2024 earnings did not fall short. The company's diluted EPS exceeded analyst expectations, and although revenue slightly missed the mark, the overall performance was robust, with significant growth in key segments like Software and Infrastructure.

|code|Ticker|Name|Date|EPS Surprise|Diluted EPS|market_code|
|---|---|---|---|---|---|---|
|IBM|IBM.N|IBM|2024 Q1|0.08|1.72|169|
|IBM|IBM.N|IBM|2024 Q2|0.24|1.96|169|
|IBM|IBM.N|IBM|2024 Q3|0.08|-0.36|169|
|IBM|IBM.N|IBM|2024 Q4|0.17|3.09|169|