IBM quarterly revenue misses estimates on weak cloud, services demand


  • Business
  • Wednesday, 17 Apr 2019

Visitors crowd the IBM stand at the CeBIT IT fair on March 2, 2011 in Hanover, central Germany. More than 4,200 tech firms from 70 countries are expected to attend this year's CeBIT, with many of the big names that stayed away during the global financial crisis returning to Germany. The fair is running until March 5, 2011. AFP PHOTO / JOHANNES EISELE

BENGALURU: International Business Machines Corp reported a bigger-than-expected drop in quarterly revenue on Tuesday, an indication that its efforts to pivot to newer businesses such as cloud, analytics, software and services remained patchy at best.

Shares of the company fell about 2.85 percent to $141 in trading after the bell.

Under Ginni Rommetty's stewardship, the company has shed many of its traditional hardware businesses and beefed up the growth areas through deals such as its $34 billion deal for Red Hat Inc, by far the company's biggest acquisition.

The company returned to annual revenue growth after seven years in the last quarter of 2018, triggering expectations that its strategy was taking roots.

Shares of the technology services giant have gained about 18 percent since Jan.22, when it reported its fourth-quarter results.

The company's revenue slipped 4.7 percent to $18.18 billion in the first quarter ended March 31 and missed analysts' average estimate of $18.46 billion, according to IBES data from Refinitiv.

Revenue from four of its business segments fell year-over-year and all of them except the cloud unit missed FactSet revenue estimates.

Its cloud and cognitive segment, which includes analytics, cybersecurity and artificial intelligence, fell 1.5 percent to $5.04 billion, but beat FactSet estimates of $4.18 billion.

"We see limited upside to revenues due to currency headwinds, tough comps from the mainframe cycle, and a potential pullforward of software revenues into Q4," said Toni Sacconaghi, analyst from Bernstein.

The company's net income fell $1.59 billion, or $1.78 per share, compared with $1.68 billion, or $1.81 per share, a year earlier

Excluding special items, the company earned $2.25 per share and beat analysts' expectation of $2.22 per share. - Reuters
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!
   

Next In Business News

Ringgit ends higher against US dollar
Genting Malaysia's unit to buy entire Series F stock of Empire for US$100mil
AME REIT plans to acquire industrial properties in Johor for RM69.3mil
MRCB bags contract for car park operations at Menara Shell, Platinum Sentral
Bursa Malaysia ends lower
Bursa Malaysia CEO takes over as chairperson of CEO Action Network
No merger of AirAsia's aviation business - Tony Fernandes
G7 price cap on Russian oil kicks in, Russia will only sell at market price
Cagamas concludes issuance of RM1.09bil bonds, sukuk
Bursa Malaysia aims for 300 PLCs to participate in transformation programme by 2025

Others Also Read