International Business Machines Corp. reported a fall in
first-quarter profit as the computing giant's revenue continued to
be stung by a sharp decline in hardware sales.
Revenue slipped to $22.48 billion, below the $22.91 billion
projected by analysts polled by Thomson Reuters. It was the eighth
straight quarter IBM has reported weaker revenue from year-earlier
levels.
Though the computing and tech giant remains a key provider of
computer hardware, software and services to big corporations and
governments around the world, IBM is struggling to respond to
technological advances such as cloud computing, which allows
customers to rent computing power and software over the Internet.
Slowing demand in emerging markets, especially China, is also
posing a challenge for Big Blue.
Revenue in IBM's systems-and-technology unit, which includes its
hardware business, slid 23% in the first quarter. The unit has now
posted year-over-year revenue declines for 10 straight
quarters.
The trend has forced Chief Executive Virginia Rometty to find
new businesses, such as data analytics and cloud computing.
However, in her annual letter to IBM shareholders earlier this
year, Ms. Rometty also noted that the company isn't exiting
hardware and vowed to turnaround the troubled segment.
IBM reported a profit of $2.38 billion, or $2.29 a share,
compared with $3.03 billion, or $2.70 a share, a year earlier.
Operating earnings, which exclude retirement-plan costs and other
items, fell to $2.54 a share from $3. Analysts expected operating
earnings of $2.54 a share.
Gross margin widened to 46.9%, up 1.3 points.
Write to Anna Prior at anna.prior@wsj.com
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