IBM Common Stock (NYSE:IBM) stock rose 4.18% (As on October 20, 11:42:09 AM UTC-4, Source: Google Finance) after the company surpassed analysts’ estimates for the third quarter and lifted its growth projection for the full year. The company ended the third quarter with a $3.21 billion loss from continuing operations, compared with income of $1.04 billion in the year-ago quarter. IBM spun off its managed infrastructure services business into Kyndryl in November 2021. During the third quarter IBM paid a one-time non-cash pension settlement charge tied to the transfer of some pension obligations and assets to third-party insurers. IBM reported an adjusted pre-tax margin of 13.9%, while analysts polled by StreetAccount had been looking for 15.1%. On a consolidated basis, year to date, net cash from operating activities is of $6.5 billion and free cash flow is of $4.1 billion.

IBM in the third quarter of FY 22 has reported the adjusted earnings per share of $1.81, beating the analysts’ estimates for the adjusted earnings per share of $1.77, according to Refinitiv. The company had reported the adjusted revenue growth of 6.5 percent to $14.11 billion in the third quarter of FY 22, beating the analysts’ estimates for revenue of $13.51 billion. Revenue from software totaled $5.81 billion. That represents growth of nearly 7.5% year over year and exceeds the $5.54 billion consensus estimate among analysts polled by StreetAccount. About 8% of software revenue came from a commercial relationship with Kyndryl, said Jim Kavanaugh, IBM’s finance chief, on the conference call. Revenue from transaction processing software grew 23%.

Consulting revenue came to $4.70 billion, which was up 5.5% and above the StreetAccount consensus of $4.51 billion. Pre-tax margins in the consulting unit narrowed to 9.8% from 10.5%. Continued labor cost inflation factored into profit for the unit.  The infrastructure segment delivered $3.35 billion, up 14.8% and higher than the $3.06 billion StreetAccount consensus. Revenue from IBM’s z Systems line of mainframe computers jumped 88%.

The company said foreign-exchange rates should result in 7% less revenue than it otherwise would generate in the full year. IBM reiterated its guidance from July of around $10 billion in free cash flow.

Meanwhile, during the quarter IBM announced the acquisition of consulting firm Dialexa and observability software startup Databand.ai, along with new servers containing its Power10 chips.