IBM Corp lowered its full-year profit forecast and reported a 14th straight quarter of declining revenue, reflecting the computer maker’s struggle to reignite growth in all of its major business units as currency fluctuations erode sales.
Full-year profit, excluding some items, is to be US$15.25, plus or minus US$0.50, compared with analysts’ average projection for a profit of US$15.68, according to data compiled by Bloomberg.
Third-quarter revenue fell 14 percent to US$19.3 billion, short of the average estimate of US$19.6 billion. A stronger US dollar reduced sales by 9 percentage points, IBM said in a statement on Monday. Adjusted profit was US$3.34 per share, compared with a US$3.30 average estimate by analysts.
IBM chief executive officer Ginni Rometty has been working to remake IBM as a provider of cloud computing and data analytics, by shedding low-margin operations, and shifting research and development investment to areas of higher returns.
Those efforts have not been enough to make up for a decline in the older businesses and weak demand in emerging markets.
As Rometty takes drastic measures to transform the 103-year-old company, such as reorganizing a workforce of almost 380,000 employees, the goal is for the new businesses to deliver US$40 billion in revenue and account for 40 percent of total sales by 2018.
IBM shares yesterday fell as much as 5.6 percent in extended trading. The stock declined less than 1 percent to US$149.22 in New York, leaving it down 7 percent this year.
IBM said that its strategic imperatives — cloud, analytics and engagement — have grown 20 percent so far this year. The group brought in US$25 billion in revenue last year.
The company has made a bet that the Watson data-analytics unit would help to drive growth. The division, which sells what IBM has called cognitive computing tools, has yet to reach US$1 billion in revenue.
Within the services division — IBM’s biggest — revenue as reported for global technology services fell 10 percent to US$7.94 billion, while global business services sales slumped 13 percent to US$4.21 billion. Revenue in the hardware division fell 39 percent to US$1.49 billion. Software sales as reported decreased 10 percent to US$5.14 billion.
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