IBM Earnings Fall in Prolonged Sales Slump
October 16 2019 - 5:16PM
Dow Jones News
By Asa Fitch
International Business Machines Corp.'s profit fell 38% in the
third quarter and it suffered another quarter of lower sales even
as Chief Executive Ginny Rometty tries to jump start growth through
the $34 billion purchase of software giant Red Hat.
IBM on Wednesday said net profit fell to $1.67 billion from
$2.69 billion the year prior. The company's closely watched
adjusted earnings per share fell to $2.68 from $3.42 in the
year-prior period, ahead of the $2.66 estimated by analysts
surveyed by FactSet. IBM sales fell to $18.0 billion, below
analysts expectations, from $18.76 billion.
The revenue decline was IBM's fifth in a row, and its 27th
overall under Ms. Rometty, who has struggled to adapt the more than
century-old company to a changing global information-technology
landscape.
IBM shares fell around 3% in after-hours trading.
The company's earnings were dented by weak performance of its
legacy business of providing IT services to other companies.
Revenue for that division fell 5.6%.
Ms. Rometty has bet heavily that IBM's growth prospects lie in
the booming cloud-computing market. Cloud revenue climbed 11% to
$5.0 billion.
Write to Asa Fitch at asa.fitch@wsj.com
(END) Dow Jones Newswires
October 16, 2019 17:01 ET (21:01 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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