IBM said it expects its third-quarter revenues to be about $19.6 billion (£12.61bn), or the same as the first quarter. According to Yahoo Finance, that revenue expectation represented a 14 percent decline compared to the year-ago quarter.
Last quarter, IBM said full-year earnings would greatly hinge on its software business, which saw a sales decline of 10 percent in the second quarter, or a 3 percent decrease when excluding currency impact. The company known as Big Blue posted earnings of US$3.84 per share on sales of US$20.8bn.
As demand has tumbled for products across all of IBMs major segments – services, software and hardware – Rometty has divested unprofitable businesses and invested in creating new units around cloud computing and the Watson data-analytics tool.
IBM reported a 17 per cent decline in net income to $3.5 billion.
IBM has reported another quarter of declining revenue and profit, though sales of its new mainframe gave it a lift. Schroeter pointed to the $700 million IBM has spent so far this year on acquisitions meant to grow those areas like its June purchase of the cloud company Bluebox and April acquisition of healthcare data company Explorys.
The investment bank and asset-management firm earned $1.67 billion, down from $1.82 billion a year earlier.
The dollar (.DXY) has risen more than 21 percent against a basket of currencies in the past 12 months. Its revenue for the quarter stood at $20.8 billion while the EPS stood at $3.84.
IBM, which gets more than half its revenue from overseas, said its quarterly results were also hurt by a strong dollar. Cloud was up more than 75 per cent, analytics 20 per cent and social 40 per cent, it said, and cloud revenues now total $7.7bn on a trailing 12-month basis. In October 2013, the Company announced that it has completed the acquisition of The Now Factory, a privately held provider of analytics software that helps communications service providers (CSPs) deliver better customer experiences and drive new revenue opportunities.
Revenue from its software business fell 10pc to $5.8bn from a year earlier. He added, “Following a thorough analysis of their cloud, we believe it may ultimately be margin dilutive for IBM, even if the company drives revenue”.
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