IBM Shares Fall Despite Third-Quarter Earnings Beat
IBM shares declined after the company maintained its full-year revenue growth forecast despite reporting third-quarter revenue and earnings that exceeded Wall Street estimates.
Shares of IBM fell between 2% and 2.9% on October 22, 2026, after the company released its third-quarter earnings report. The company reported revenue of $17.1 billion, a year-on-year increase of 4.7% to 5%, and adjusted earnings of $2.95 per share. While both figures beat Wall Street expectations, the stock declined because the company maintained its full-year constant-currency revenue growth forecast of 4% to 5%.
Investors viewed the unchanged guidance as an indication that the quarterly performance stemmed from recovering delayed deals rather than an acceleration in new demand. Chief Financial Officer Jim Kavanaugh noted that two-thirds of large enterprise deals that had slipped in the second quarter closed during the third. Analysts further observed that a significant portion of the 9% growth in software was linked to the $11 billion acquisition of Confluent.
Chief Executive Officer Arvind Krishna highlighted strengths in hybrid cloud and AI platforms but cautioned that growth in transaction processing would not remain in double digits. Additionally, mainframe hardware sales dropped 20%. Despite these headwinds, the company raised its annual free cash flow expansion target to over $1 billion.
