IBM Has Another Revenue Drop During Its Transition
October 17 2017 - 4:13PM
Dow Jones News
By Ted Greenwald
International Business Machines Corp. reported declines in
quarterly profit and sales in the third quarter, a sign the
company's drawn-out transformation still has a way to go.
Revenue dropped 0.4% to $19.15 billion, marking its 22nd
consecutive quarter of year-over-year declines.
IBM is trying to transition from older, shrinking businesses,
such as building and maintaining technology on customers' premises,
to higher-growth operations like delivering pay-as-you-go services
over the internet. It has placed big bets on emerging technologies,
such as artificial intelligence and blockchain, which is the
networked ledger at the heart of bitcoin digital currency.
The transition initiated five years ago by Chief Executive Ginni
Rometty, though, has been slow.
Newer businesses such as cloud computing and the Watson
artificial intelligence platform, called strategic imperatives by
IBM, grew 10% over the past 12 months, accounting for 45% of the
company's revenue, the company said. Cloud revenue jumped 25% in
the past 12 months.
In all, IBM reported a profit of $2.73 billion, or $2.92 per
share, compared with earnings of $2.85 billion, or $2.98 per share
a year earlier.
The Armonk, N.Y., computing giant reported per-share earnings of
$3.30 on an adjusted basis, omitting such items as acquisition- and
retirement-related charges. Analysts had expected $3.28 a share, on
$18.6 billion in revenue, according to a survey by Thomson
Reuters.
Shares in the 106-year-old company rose 3% to $151 in
after-hours trading, after closing down 0.2% on Tuesday. The stock
had fallen 12% this year, compared with the S&P 500's gain of
14%.
IBM reiterated its annual forecast, calling for adjusted
per-share earnings of at least $13.80.
Write to Ted Greenwald at Ted.Greenwald@wsj.com
(END) Dow Jones Newswires
October 17, 2017 16:58 ET (20:58 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
International Business M... (NYSE:IBM)
Historical Stock Chart
From Mar 2024 to Apr 2024
International Business M... (NYSE:IBM)
Historical Stock Chart
From Apr 2023 to Apr 2024
