SAN FRANCISCO (AP) — IBM's latest earnings report shows a continued sales slump, as weak hardware sales and a strong dollar brought revenue down for the 14th quarter in a row.
The results were better than Wall Street expected for earnings, but revenue missed estimates. IBM's shares nearly 5 percent in late trading Monday after IBM announced the results and also lowered its guidance for the full year.
Armonk, New York-based International Business Machines Inc., reported third-quarter profit of $2.95 billion on revenue of $19.28 billion. Earnings amounted to $3.01 per share, or $3.34 per share after adjusting for costs related to acquisitions and non-recurring expenses.
Analysts surveyed by Zacks Investment Research were expecting adjusted earnings of $3.33 a share, on revenue of $19.64 billion.
Revenue was down nearly 14 percent, from $22.4 billion in the same period a year ago. Net income rose from $18 million a year earlier, when the company incurred pretax charges related to its former chip-making operations, which it has sold.
IBM CEO Virginia Rometty has been working to shift the company's focus from traditional commercial computing to what she calls "high value" strategic priorities, including cloud computing, data analytics and cyber-security. Revenue in those areas grew 17 percent over the previous year.
Rometty said in a statement that IBM is making progress in that shift. But the company said its revenue from computer hardware systems fell nearly 39 percent. It also said revenue was hurt by foreign currency rates.
IBM shares have dropped 7 percent since the beginning of the year, while the Standard & Poor's 500 index has fallen slightly more than 1 percent. Shares closed Monday at $149.22, down 0.78 percent for the day, before falling further in after-hours trading.
– by AP Reporter Brandon Bailey
