IBM's quarterly business figure is lacking for weak mainframe IT activity By Reuters

By Sayanti Chakraborty

(Reuters) – International Business Machines (NYSE 🙂 Corp. Tuesday announced a larger-than-expected decline in first-quarter revenue, hurt by lower demand for mainframes and a stronger dollar, dropping its shares by about 3 percent .

The technology giant's revenues in all of its core business units, with the exception of the cloud, which has been the centerpiece of its turnaround strategy, have missed analysts' estimates.

IBM's cloud and cognitive segment, which includes analytics, cybersecurity and artificial intelligence, declined 1.5% to $ 5.04 billion in the quarter, but exceeded estimates of 4%. $ 18 billion set by FactSet.

"We have seen a good acceleration in our cloud business (…) and our trajectory is improving as we move forward," said Jim Kavanaugh, chief financial officer.

Under the leadership of Ginni Rometty, the company has abandoned many of its traditional hardware businesses and strengthened growth areas through agreements such as its $ 34 billion acquisition for Red Hat Inc. (NYSE :).

IBM has returned to its annual revenue growth in the last quarter of 2018, raising expectations that its strategy will be ingrained.

The company's systems segment, which is home to its mainframe business, fell 11.5% to $ 1.33 billion in the current quarter, missing the $ 1.37 billion estimate from FactSet.

Its overall business figure dropped 4.7% to $ 18.18 billion in the first quarter ended March 31, and surpassed the average analyst estimate of 18.46%. billions of dollars, according to Refinitiv's IBES data.

Net income fell to $ 1.59 billion, or $ 1.78 per share, in the quarter ended March 31, from $ 1.68 billion, or $ 1.81 per share, a year ago .

Excluding non-recurring items, the company posted earnings of $ 2.25 per share and exceeded analysts' expectations of $ 2.22 per share.

The company maintained Tuesday its adjusted operating profit for 2019 at "at least" $ 13.90 per share. Analysts were waiting on average $ 13.91 per share.