IBM Suffers Twelfth Consecutive Revenue Decline

IBM on Monday reported its twelfth consecutive quarter of revenue decline, with net income from the first quarter of 2015 down five percent to $2.4 billion (£1.6bn).

Overall revenues from IBM’s operations in the first quarter of this year are standing at $19.6 billion (£13.2bn), which is down 12 percent year-on-year. Even adjusting for currency, this figure is still flat.

Transformation

CEO of the 104-year-old company Ginni Rometty noted that the underwhelming results are still due to the change going on at IBM. She said: “Our focus on higher value through portfolio transformation and investment in key areas of the business drove continued margin expansion.”

Looking ahead, IBM is predicting a flat year. The firm’s EMEA markets were hit the hardest, with revenues down 19 percent. Asia-Pacific revenues dived 18 percent to $4.1 billion (£2.8bn) and the Americas’ first quarter revenues were at $9.3 billion (£6.3bn), a decrease of 3 percent year on year.

Another factor in IBM’s figures, which did in fact meet analyst expectations, was the ‘workforce rebalancing’. Continuing layoffs bled $870 million (£584m) from Big Blue in the first quarter of this year.

However, IBM’s revenues from System z mainframe server products increased 118 percent compared with the year-ago period. Total delivery of System z computing power, as measured in MIPS (millions of instructions per second), increased 95 percent.

Revenues from IBM’s software business were down 8 percent to $5.2 billion (£3.5bn) (down 2 percent adjusting for currency) compared with the first quarter of 2014.

The firm’s Global Services revenues decreased 12 percent to $12.2 billion (£8.2bn). Global Technology Services business revenues were down 11 percent to $7.9 billion (£5.3bn). Global Business Services segment revenues were down 13 percent to $4.3 billion (£2.9bn).

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