stockmarket

IBM quarterly revenue misses on weak mainframe computer business


© Reuters. The logo for IBM is displayed on a screen on the floor of the NYSE in New York

By Sayanti Chakraborty

(Reuters) – International Business Machines (NYSE:) Corp reported a bigger-than-expected drop in first-quarter revenue on Tuesday, hurt by tapering demand for its mainframe computers and a stronger dollar, sending its shares down about 3 percent.

The technology giant’s revenue at all its main business units except cloud, which has been the centerpiece of its turnaround strategy, missed analysts’ estimates.

IBM’s cloud and cognitive segment, which includes analytics, cybersecurity and artificial intelligence, fell 1.5 percent to $5.04 billion in the quarter, but beat FactSet estimates of $4.18 billion.

“We saw good acceleration in our cloud business… We now have an improving trajectory as we move forward,” Chief Financial Officer Jim Kavanaugh said.

Under Ginni Rometty’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 acquisition for Red Hat Inc (NYSE:).

IBM returned to annual revenue growth in the last quarter of 2018, triggering expectations that its strategy was taking roots.

The company’s systems segment, which houses its mainframe computer business, fell 11.5 percent to $1.33 billion in the reported quarter, missing FactSet estimates of $1.37 billion.

Its overall revenue slipped 4.7 percent to $18.18 billion in the first quarter ended March 31 and missed the average analyst estimate of $18.46 billion, according to IBES data from Refinitiv.

Its net income fell to $1.59 billion, or $1.78 per share, in the quarter ended March 31 from $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.

The company on Tuesday maintained its adjusted operating profit for 2019 to be “at least” $13.90 per share. Analysts on an average were expecting $13.91 per share.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.