New York, NY, United States (4E) – International Business Machines’ (IBM) reported a 1.1 percent decline in first-quarter profits as the U.S. computing and tech services company posted lower sales in hardware and services.
IBM said earnings hit $ 3.03bn, or $ 2.70 per share, lower compared to the $ 3.07bn, or $ 2.61 per share, a year ago.
The latest figure missed analysts’ forecast of $ 3.05 a share, according to data from Bloomberg News, marking the first time in eight years that the Big Blue failed to meet estimates.
Revenue dropped 5.1 percent to $ 23.41bn, or 3 percent after being adjusted for impact of currency movements. Operating earnings, where retirement-plan costs and amortization are included, climbed to $ 3 per share to $ 2.78bn.
In the second quarter, IBM is also expected to spend $ 1bn for its plan to lay off workers this year and is considering divesting some businesses as well.
In a statement, IBM Chief Executive Ginni Rometty said the company did not achieve all of its targets during the period due to its failure to close several software and mainframe transactions that have started to move in the second quarter.
IBM’S earnings result is closely followed since it is a bellwether for tech spending among public and private sectors. Economic uncertainty and weak spending in technology for the past several quarters have hurt the company’s overall revenue.
The Armonk, New York-based company has been working to shed less profitable units and cut costs, while promoting growth for its higher-margin software and services businesses.
Category: Computing And Information Technology
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