In its recent third quarter results, IBM (NYSE: IBM) came quite close to breaking the streak of 22 straight quarters of revenue declines. However, despite the revenue decline of 0.4%, it handily beat revenue and earnings estimates and looks set for a boost to its stock.

IBM’s Financials

Revenues for the third quarter declined 0.4% to $19.15 billion, but beat analyst estimates of $18.6 billion. Adjusted earnings of $3.3 for the quarter were also better than the Street’s estimates of $3.28. Net income fell to $2.73 billion or $2.92 per share from $2.85 billion or $2.98 per share, a year ago.

By segment, revenue from Cognitive Solutions including Watson increased 4% to $4.4 billion versus analyst estimates of $4.17 billion. Global Business Services revenue was down 2% to $4.1 billion. Technology Services & Cloud Platforms revenue fell 3% to $8.5 billion and Systems revenue was up 10% to $1.7 billion. Global Financing revenue was up 4% to $427 million.

Strategic Initiatives revenue for the second quarter grew 11% to $8.8 billion. Within the segment, revenue from cloud grew 20% to $4.1 billion, analytics grew 5%, mobile grew 7%, and security grew an impressive 51%. On a trailing twelve-month basis, strategic imperatives revenues grew 10% to $34.9 billion with cloud revenues at $15.8 billion.

IBM ended the third quarter of 2017 with $11.5 billion of cash on hand. Debt totalled $45.6 billion, including Global Financing debt of $29.4 billion. IBM’s free cash flow was $2.5 billion. IBM returned $1.4 billion in dividends and $0.9 billion of gross share repurchases to shareholders. At the end of September 2017, IBM had $1.5 billion remaining in the current share repurchase authorization.

IBM reassured the market that it was still forecasting an operating EPS of at least $13.80 for the full year. The market was looking for a full year EPS forecast of $13.75.

IBM expects revenue to grow by $2.8 billion to $2.9 billion in fourth quarter from the third quarter, which translates to fourth-quarter revenue of $22 billion to $22.1 billion, or growth of about 1.4% at the high end.

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