Photograph by Getty Images
By Jonathan Vanian
January 20, 2017

Despite reporting its 19th consecutive quarter of declining sales,IBM insists it’s on the right path. However, the company is still not ready to say when revenue will start climbing again.

During a conference call Thursday after reporting fourth quarter earnings, analysts peppered IBM CFO Martin Schroeter with questions about when revenue from his company’s so-called strategic imperatives—hot businesses like cloud computing, Watson data crunching, and security—would finally offset the declines in the company’s core businesses like software licenses, servers, and consulting services.

Strategic imperatives, which now account for 41% of IBM’s overall sales, generated $32.8 billion in revenue in 2016. The company’s overall annual sales, however, fell 2% to $80 billion.

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With its revenue from strategic imperatives rising each quarter (sales in those business units jumped 11% year-over-year in the fourth quarter), IBM is nearing a point at which its overall revenue should stabilize, Stifel analyst David Grossman noted on the conference call. Schroeter responded that IBM was “reasonably close” to stopping the bleeding during the past two quarters, but he did not predict whether the company would start growing again in 2017.

“We’re focused on driving value in those strategic imperatives not just grabbing a little bit of revenue to have some math worked out, differently,” Schroeter said.

When UBS analyst Steve Milunovich asked Schroeter to put IBM’s turnaround in baseball terms—what inning is IBM in, he asked—Schroeter responded that he didn’t know. Schroeter reiterated the importance of IBM’s strategic imperatives and explained that the company would continue to invest in them.

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“I don’t think the transformation of IBM ever ends, quite frankly,” Schroeter said.

IBM still remains profitable, reporting quarterly earnings of $4.5 billion, up slightly from the same quarter a year earlier. On an annual basis, IBM’s profits fell 10% year-over-year to $11.9 billion in 2016.

IBM’s shares fell 2% to $163.00 in the after-hours trading on Thursday.

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