Categories: CloudCloud Management

IBM Touts ‘Robust Performance’, Cloud And Watson As Sales Fall

IBM’s management team have talked up the firm’s cloud and cognitive solutions, but the cold hard light of Wall Street’s fiscal scrutiny has revealed another quarterly decline in both sales and profits.

IBM is a company attempting to reinvent itself in the face of ongoing pressure from decreasing hardware and stagnating software earnings.

Indeed, chairman, president and chief executive officer Ginni Rometty has previously acknowledged that the company is shrinking “by design”, as part of its refocusing on the cloud and analytics.

Fiscal Pain

But the first quarter earnings revealed that IBM’s corporate ‘transformation to higher value’ continues to take a toll on Big Blue.

For the three months ending 31 March, it had posted net income of $1.7 billion (£1.4bn), down from $2 billion (£1.6bn) in the same year-ago quarter. There was equally depressing news on the revenue front, as sales fell to $18.2 billion (£14.2bn) from $18.7 billion (£14.6bn) a year ago.

Analysts had been expecting sales of $18.39 billion (£14.4bn).

It is worth noting that this is now the 20th consequential quarter of shrinking revenues for Big Blue, and therefore its shares fell 4.7 percent to $162 (£126) in trading on Tuesday.

“In the first quarter, both the IBM Cloud and our cognitive solutions again grew strongly, which fueled robust performance in our strategic imperatives,” said Rometty.

“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.”

Unit Breakdown

Rometty was right to point to IBM’s cognitive solutions performance, as it was the only unit to post a rise in the past three months.

The cognitive solutions division posted revenues of $4.1 billion (£3.2bn), up from $4.1 billion (£3.2bn), driven by growth in analytics and security, which include Watson-related offerings.

But all of IBM’s other units struggled.

The Business Services division for example posted revenues of $4bn (£3.1bn), down from $4.1bn (£3.2bn).

The tech services and cloud unit meanwhile posted revenues of $8.2bn (£6.4bn), down from $8.4bn (£6.6bn) a year ago. IBM did say however that first-quarter cloud revenues had increased 33 percent to $3.5bn (£2.7bn).

Hardware continues to flatline with revenue at the Systems unit coming in at $1.4bn (£1.1bn), down from $1.7bn (£1.3bn)

Quiz: Do you know all about IBM, the founder of the IT industry?

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

Recent Posts

Boeing Starliner Launches Successfully, On Route To International Space Station

Boeing's crewless space taxi, CST-100 Starliner, one step closer to NASA certification, as it enters…

1 day ago

Apple Accused By Union Of Staff Law Violations At NY Store

Staff at Apple's World Trade Centre store in New York are allegedly being questioned and…

2 days ago

Canada To Join Five Eyes 5G Ban On Huawei/ZTE

Making it official. Canada is to turn its unofficial ban on 5G kit from Huawei…

2 days ago

Twitter To Hide Tweets That Share False Information During A Crisis

Potentially risking Elon's wrath over free speech, Twitter says it will hide tweets spreading misinformation…

2 days ago

Boeing Starliner Test Flight Readied For Tonight

Third time the charm? Main rival to SpaceX's Dragon capsule, the embattled Boeing Starliner spacecraft,…

2 days ago

September 13 Slated For iPhone 14 Launch – Report

No surprise there. Apple is slated to launch the iPhone 14 on 13 September according…

2 days ago