IBM shares drop more than 3% after revenue falls for 20th consecutive quarter
Research Triangle Park, N.C. — Investors are selling off IBM shares after Big Blue reported a drop in revenue for the 20th consecutive quarter Tuesday after the markets closed.
Shares fell to $1.64.39 15 minutes after IBM issued the earnings report. That price was down $5.70 from the close of $170.09, or more than 3 percent.
Ahead of earnings, IBM shares fell $1.01 or 0.6 percent. Thus, Big Blue shed $6.71 as after-hours trading continued.
Year-over-year revenue fell 2.8 percent, to $18.16 billion from $18.68 billion, Reuters reported.
Net income fell to $1.85 per share, down from $2.09 year-over-year, to $1.75 billion, the wire service added.
CNBC noted that analysts had expected revenue of $18.4 billion
IBM Chair and CEO stressed Big Blue's growth in areas she calls "strategic imperatives" as a positive.
"In the first quarter, both the IBM Cloud and our cognitive solutions again grew strongly, which fueled robust performance in our strategic imperatives," Rometty said in a statement. "In addition, we are developing and bringing to market emerging technologies such as blockchain and quantum, revolutionizing how enterprises will tackle complex business problems in the years ahead."
- Strategic imperatives revenue of $7.8 billion in the quarter, up 12 percent (up 13 percent adjusting for currency)
- Strategic imperatives revenue of $33.6 billion over the last 12 months represents 42 percent of IBM revenue
- Cloud revenue of $14.6 billion over the last 12 months
- Cloud as-a-Service annual exit run rate of $8.6 billion in the quarter, up 59 percent year to year (up 61 percent adjusting for currency)
In a slide presentation offered during the conference call, IBM noted that revenues by its five primary segments included only one that was up year-over-year.
Cognitive solutions grew to $4.1 billion, up 3 percent.
However, global business services fell 2 percent to $4 billion.
Technology services and cloud revenues were $8.2 billion, also down 2 percent.
Systems, which includes IBM servers and hardware, took the biggest hit, down 16 percent to $1.4 billion'
Global financing declined 2 percent to $400 million.
IBM (NYSE: IBM) operates one of its largest campuses in RTP and employs several thousand people across N.C.
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