Menu
IBM earnings slump as company shifts to cloud, mobile and analytics

IBM earnings slump as company shifts to cloud, mobile and analytics

Areas such as cloud services and mobile aren't growing fast enough to make up for declines in other areas

IBM is hitting a rough patch financially as it shifts its strategy from hardware to cloud, mobile and analytics technology.

The company, considered a technology bellwether for the scope of its product portfolio and geographical breadth, reported Monday that profit and revenue declined in the third quarter.

"We are disappointed in our performance. We saw a marked slowdown in September in client buying behavior, and our results also point to the unprecedented pace of change in our industry," CEO Ginni Rometty said in a statement.

IBM results indicate that the company is finding it tough to keep up with the change. Third-quarter net income was US$3.5 billion compared with $4.1 billion in the third quarter of 2013, a decrease of 17 percent. Revenue was down 4 percent year-on-year to $22.4 billion.

On a slightly more upbeat note, what IBM calls strategic growth areas -- including cloud, data and analytics, security, social and mobile -- performed well, the company said. The company did not break out numbers for all of these sectors, however. Like other tech vendors, IBM wants to shift its business to these areas. However, for the moment they aren't growing fast enough for the company to make up for shortfalls in other sectors.

The results are from continuing operations and exclude the discontinued microelectronics business, which chip manufacturer GlobalFoundries is taking over in a deal that was also announced on Monday. IBM is paying chipset manufacturer about US$1.3 billion to take two factories off its hands in a move to cut costs.

The loss from discontinued operations in the third quarter includes a pre-tax charge of $4.7 billion, IBM said.

IBM earlier this month closed a deal to sell its x86 server business to Lenovo for $2.1 billion.

Company shares dropped 7 percent to $169.30 in pre-market trading.

Send news tips and comments to mikael_ricknas@idg.com


Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags business issuesIBMfinancial results

Featured

Slideshows

Sizing up the NZ security spectrum - Where's the channel sweet spot?

Sizing up the NZ security spectrum - Where's the channel sweet spot?

From new extortion schemes, outside threats and rising cyber attacks, the art of securing the enterprise has seldom been so complex or challenging. With distance no longer a viable defence, Kiwi businesses are fighting to stay ahead of the security curve. In total, 28 per cent of local businesses faced a cyber attack last year, with the number in New Zealand set to rise in 2017. Yet amidst the sensationalism, media headlines and ongoing high profile breaches, confusion floods the channel, as partners seek strategic methods to combat rising sophistication from attackers. In sizing up the security spectrum, this Reseller News roundtable - in association with F5 Networks, Kaspersky Lab, Tech Data, Sophos and SonicWall - assessed where the channel sweet spot is within the New Zealand channel. Photos by Maria Stefina.

Sizing up the NZ security spectrum - Where's the channel sweet spot?
Kiwi channel comes together for another round of After Hours

Kiwi channel comes together for another round of After Hours

The channel came together for another round of After Hours, with a bumper crowd of distributors, vendors and partners descending on The Jefferson in Auckland. Photos by Maria Stefina.​

Kiwi channel comes together for another round of After Hours
Consegna comes to town with AWS cloud offerings launch in Auckland

Consegna comes to town with AWS cloud offerings launch in Auckland

Emerging start-up Consegna has officially launched its cloud offerings in the New Zealand market, through a kick-off event held at Seafarers Building in Auckland.​ Founded in June 2016, the Auckland-based business is backed by AWS and supported by a global team of cloud specialists, leveraging global managed services partnerships with Rackspace locally.

Consegna comes to town with AWS cloud offerings launch in Auckland
Show Comments