- IBM revenue falls for third quarter in a row
- Revenue from sales of IBM Z servers for the year decreased by 38%
- The Red Hat acquisition will be completed in the second half of the year.
IBM was one of the first about work in the first quarter of the 2019 calendar year. IBM's report fell short of market observers' expectations on several points. Following this news, the company's shares began to slide down yesterday. In the annual perspective, IBM does not lose hope of leveling out the situation and promises to keep earnings per share in the area of ββββthe previously established value - $13,90, excluding some operations.
Strictly speaking, the company's revenue in the first quarter of the 2019 calendar year amounted to $18,18 billion. Experts expected something different from IBM - $18,46 billion. Thus, the annual decline in quarterly revenue reached 4,7% and led to the fact that IBM showed an annual decline third quarter in a row. I've had worse. Against the background of business restructuring before the situation stabilized in the fourth quarter of 2017, the company showed a decrease in revenue for as many as 22 quarters in a row. Today the situation is not so dire. In addition, IBM suffered due to currency fluctuations. If the national exchange rates of IBM's clients had not changed over the year, revenue would have decreased by only 0,9% - not that much.
According to the results of the first quarter, the yield per share of IBM according to the GAAP method was $1,78 per share. Calculation using non-GAAP methods (excluding some transactions) showed profitability at $2,25 per share, which is better than analysts' forecasts ($2,22 per share). That and a promise to keep earnings at year-over-year levels kept IBM shares from falling further.
It should be noted that the company has slightly changed the structure of the quarterly report. In particular, instead of the Technology Services & Cloud Platforms segment, the report is divided into two independent categories: Cloud & Cognitive Software and Global Technology Services.
The Global Technology Services direction brought the company the most revenue - $6,88 billion. On an annual basis, revenue for the quarter decreased by 7% (by 3% excluding currency fluctuations). This direction takes into account income from cloud services, support and related infrastructure. The Cloud & Cognitive Software sector, which includes cognitive technologies (AI, machine learning and others), as well as related platforms, brought IBM $5,04 billion, or 2% less (2% more without taking into account currency fluctuations). The Global Business Services sector added $4,12 billion to the company's treasury, which is almost the same as a year ago (or 4% more without taking into account currency fluctuations).
The company is still at odds with the hardware division of IBM Systems. During the reporting quarter, the Systems sector brought the company $1,33 billion, or 11% less than in the same quarter last year. Excluding currency fluctuations, revenue decreased by 9%. The company explains the problems with current revenue from sales of server platforms to βthe dynamics of the product cycle of mainframe Z.β This product category filled IBM's pockets well in the first quarter of 2018, and thus spoiled the basis for the revenue benchmarking analysis in the first quarter of 2019. Specifically, quarterly revenue from sales of IBM Z servers fell by 38% over the year.
IBM is trying to mitigate its lackluster quarterly results by promising to keep full-year results in 2019 under control, with good dividends, promises to buy back shares, and by demonstrating that it will continue to accumulate cash to run its business. The company has accumulated $18,1 billion of these funds. IBM also announced that it will complete the takeover of Red Hat in the second half of this year.
Source: 3dnews.ru