Spotify projects quarterly profit above estimates as shares rise
The streaming company expects premium subscribers to reach 316 million in the fourth quarter, exceeding analyst expectations despite a lower user forecast.
IBM shares fall 6.5% as analysts question software rebound
IBM raised its annual software growth outlook but left its overall revenue forecast unchanged as analysts highlighted the contribution from delayed deals.
IBM shares dropped 6.5% in premarket trading on October 22 as analysts questioned whether its third-quarter software recovery could last. BofA Global Research analysts said transactions postponed from the second quarter accounted for about $250 million of software growth, making the underlying improvement more modest.
The company lifted its forecast for annual software revenue growth to about 7% to 8%, compared with its previous range of 6% to 8%. It did not change its outlook for overall revenue growth.
Revenue from transaction processing, which includes software used with IBM's mainframe computers, increased 9% in the third quarter. CEO Arvind Krishna said he did not expect that pace to persist and anticipated more normal performance, particularly next year. Bernstein said IBM's outlook implied a slight fourth-quarter sales decline in the unit as the benefit from postponed transactions fades.
The shares had already lost about 15% this year through the October 21 close. That decline included July's biggest single-day fall in more than a century, after Krishna acknowledged shortcomings in IBM's response to changing customer spending. The premarket decline, if sustained, would erase more than $15 billion in market value.