IBM misses revenue estimates as server sales slow

(Reuters) – International Business Machines Corp. missed on Tuesday Wall Street's third-quarter revenue estimates, weighed down by slowing demand for its mainframe servers.

Overall revenue fell 2.1% to $ 18.76 billion in the three months ended September 30, missing the average analyst estimate of $ 19.10 billion, according to data I / B / E / S from Refinitiv.

IBM's Systems Unit, which includes mainframe servers sold to large companies, grew by about 1 percent, up from 25 percent in the previous quarter.

According to analysts, IBM's z14 server sales, launched about a year ago, are slowing, as customers wait for new machines to be launched before the upgrade.

Still according to FactSet, system sales of $ 1.74 billion were below analysts' estimates of $ 1.79 billion.

IBM's cognitive software industry, which hosts Watson's artificial intelligence platform, analytics and cybersecurity services, reported revenue of $ 4.15 billion, down 6% from last year. in the previous year and also below expectations.

The technology services giant based in Armonk, New York, which generates more than 60% of its revenue outside the United States, warned that the impact of the strengthening of the dollar would affect the results of the second half of 2018.

IBM's net profit fell to $ 2.69 billion from $ 2.73 billion a year ago. Per share, earnings increased from $ 2.92 to $ 2.94, due to fewer shares outstanding.

Excluding non-recurring items, IBM earned $ 3.42 per share, while analysts expected $ 3.40. It was not clear right away if the numbers were comparable.