(Reuters) – International Business Machines reported its 14th consecutive fall in quarterly revenue and also fell short of analysts’ estimates, hurt by a strong dollar and the sale of low-margin businesses.
Shares of the world’s largest technology services company (IBM) were down 3% in after-market trading on Monday.
IBM is shifting from making hardware to cloud computing and, like established rivals such as Oracle and Microsoft, is striving to boost Internet-based software and services sales to compete with Salesforce.com and Amazon.com’s web software unit.
Big Blue has been selling low-margin businesses such as cash registers, low-end servers and semiconductors to focus on high-growth areas such as security software and data analytics, besides cloud-based services.
But, the sale of these businesses and a strong dollar ate into revenue. IBM’s total revenue fell 13.9% to $19.28 billion in the third quarter ended Sept 30.
Analysts on average were expecting $19.62 billion, according to Thomson Reuters I/B/E/S, meaning the company’s revenue has now missed Wall Street’s estimates for five quarters in a row.
Armonk, New York-based IBM gets more than half its revenue from overseas. The average value of the dollar against a basket of currencies in the third quarter was about 17% higher than the same quarter last year.
Even adjusted for currency and divestitures, the company’s revenue fell 1%.
IBM’s net income from continuing operations fell to $2.96 billion, or $3.02 per share, from $3.46 billion, or $3.46 per share, a year earlier.
Consolidated net income rose to $2.95 billion, or $3.01 per share, from $18 million, or 2 cents per share, a year earlier.
Last year profit was hurt by non recurring pre-tax charge of $3.3 billion, net of tax for discontinued operations.
Excluding items, IBM earned $3.34 per share from continuing operations in the latest quarter, beating the average analyst estimate of a profit of $3.30 per share.
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