World's largest technology services company has seen revenue shrinking for the last 3 years
International Business Machines Corp reported a 12 percent fall in
first-quarter revenue as the technology company continues to shed unprofitable
businesses to focus on cloud-computing initiatives.
Shares in the
world's largest technology services company flitted around the unchanged mark
in after-hours trading on Monday.
It was the 12th
straight quarter that the Armonk, New York-based company reported a drop in
quarterly revenue, including the effects of currency.
has been shrinking for three years now as the company sheds low-profit
businesses such as cash registers, low-end servers and semiconductors and
focuses on emerging areas such as security software and cloud services, but the
new businesses have so far failed to make up for revenue lost to divestitures.
are showing patience with IBM's slow transformation, but there are signs that
some are uneasy after a 13 percent decline in its shares over the past 12
months. Some top shareholders have sought help from activist investors to shake
up the company, Reuters reported earlier this month
IBM did say
that it has generated $7.7 billion in total cloud revenue over the past 12
months, up sharply from the year before. Technology investors are intently
focused on the new Internet-based "cloud" model and which companies
are making money from it. Amazon.com Inc, a leader in the sector, is expected
to disclose financials from its Amazon Web Services cloud unit for the first
time later this week.
IBM, which gets
more than half its revenue from overseas, also said it now expects a 7 percent
impact from currency headwinds in the full year. It said in February it
expected more than 6 percent.
Net income fell
slightly to $2.33 billion for the quarter ended March 31 from $2.38 billion a
year earlier. On a per share basis, profit rose to $2.35 from $2.29 as there
were fewer shares outstanding in the first quarter.
charges, it earned $2.91 per share, well ahead of analysts' average forecast of
$2.80, according to Thomson Reuters I/B/E/S.
fell to $19.6 billion from $22.2 billion. That was broadly in line with
analysts' average estimate of $19.64 billion.
closed up 3.4 percent at $166.16 in regular trading on the New York Stock
Exchange on Monday.