IBM earnings: $3.29 per share vs expected EPS of $3.23

IBM beats on top and bottom lines
IBM beats on top and bottom lines

IBM reported third-quarter earnings and revenue that beat analysts' expectations on Monday.

The stock was initially up more than 1 percent in extended trading before reversing. It was last down 3 percent after hours.

The enterprise technology company reported adjusted earnings of $3.29 per share on revenue of $19.23 billion. Analysts expected the company to post earnings of $3.23 per share on about $19 billion in revenue, according to a Thomson Reuters consensus estimate.

CEO Ginni Rometty said IBM's quarterly performance was helped, in particular, by growth in the company's "strategic imperatives," which include businesses like cloud, analytics, mobility and security.

"Our ability to apply deep expertise and breakthrough technology, led by Watson and the IBM Cloud, to massive amounts of data is enabling us to build new markets and transform industries," she said in a statement.

Under Rometty, the legacy technology company has migrated toward cloud-based services, a key component of IBM's strategic imperatives. Those initiatives saw their third-quarter revenue grow 16 percent year over year. IBM also said its quarterly cloud revenue grew 44 percent year over year.

CFO Martin Schroeter told CNBC's "Closing Bell" that IBM will continue to look for investment opportunities, given the success the company has seen after those decisions.

"We're certainly investing quite heavily and we'll continue to do that. We're getting good returns on the investments we've made," Schroeter said on Monday.

IBM's technology services and cloud platforms segment, which includes the company's strategic imperatives, brought in $8.75 billion in revenue during the quarter. Wall Street had expected about $8.51 billion in revenue for the quarter, according to a FactSet consensus estimate.

The company also reiterated its full-year guidance and continues to expect adjusted earnings of at least $13.50 a share for fiscal 2016.

As of their Monday close, shares of IBM had gained 12 percent so far this year.