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

Subscribe here for up-to-date channel news

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags business issuesIBMfinancial results

Featured

Slideshows

StorageCraft celebrates high achievers at its inaugural A/NZ Partner Awards

StorageCraft celebrates high achievers at its inaugural A/NZ Partner Awards

Revealed at a glitzy bash in Sydney at the Ivy Penthouse, the first StorageCraft Partner Awards locally saw the vendor honour its top-performing partners with ASI Solutions, SMBiT Pro, Webroot, ACA Pacific and Soft Solutions New Zealand taking home the top awards. Photos by Maria Stefina.

StorageCraft celebrates high achievers at its inaugural A/NZ Partner Awards
Kiwi resellers make a splash on Synnex and Lenovo RotoVegas road trip

Kiwi resellers make a splash on Synnex and Lenovo RotoVegas road trip

​Synnex and Lenovo hosted 18 resellers for an action-packed weekend adventure in RotoVegas, taking in white water rafting on the Kaituna River, as well as quad biking and dinner at Stratosfare​, overlooking Lake Rotorua at the top of Mount Ngongotaha​. Photos by Synnex.

Kiwi resellers make a splash on Synnex and Lenovo RotoVegas road trip
Show Comments