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IBM attributed another quarter of slowdown to currency and buying cycles, while Big Blue recorded a decline in revenue for the third consecutive quarter. This means that sales have declined again.
The mainstream computing giant has seen its operations of systems and services take a particularly hard blow in its first quarter of 2019, closed on March 31st. Here is a summary of the numbers released Tuesday of this week:
- Revenues of $ 18.2 billion fell 4.7% from $ 19.1 billion in the first quarter of last year, and also below Wall Street's expectations
- Net income of $ 1.6 billion was down 5% from $ 1.68 billion in the first quarter of 2018.
- Earnings per share (non-GAAP) of $ 2.25 was ahead of badysts' estimates of $ 2.24.
- Global technology services revenue was $ 6.9 billion, down 7% from the same quarter a year ago.
- The $ 5 billion business turnover of cloud and cognitive services has decreased by 2%.
- The $ 4.1 billion business turnover of Global Business Services was stable.
- Systems revenue was € 1.3 billion, down 11%. IBM Z's revenue decreased by 38% due to the slowdown in the mainframe purchase cycle.
- Global financing revenues were $ 406 million, stable one year on the other.
"Our results reflect the fundamental changes we have made to our business, enabling us to generate greater leverage." In the first quarter, we significantly increased profit margins, thanks to our service activities, "said James Kavanaugh, IBM's chief financial officer.
"Our focus on investing in the high-value emerging segments of our industry has allowed us to increase our profitability and generate strong cash generation."
Speaking to financial badysts about the quarterly report, Kavanaugh pointed out that Big Blue's cloud operations and hybrid offerings were particularly strong markets on which the company wanted to focus.
He also pointed out that the strength of the dollar (which drives down conversion rates) and strong quarterly sales at the end of 2018 are factors that have allowed IBM's finances to remain seemingly down on paper, as well as changes to Global Technology Services' business.
"We have launched a strategy to remove low-value OEM content from third parties," Kavanaugh said.
"We said it would depreciate value in the short term but better position us in the long run."
Investors did not seem as secure as IBM's shares traded at $ 141 each, down 2.7% after normal business hours. Big Blue employs 380,000 people worldwide. ®
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