International Business Machines reported a bigger-than-expected drop in revenue for the first time in five quarters, hurt by weak demand in its technology services business.
Shares of IBM, whose revenue has now fallen for 20 quarters in a row, were down 3.7% at $163.71 in trading after the bell on Tuesday.
The company said revenue fell 2.8%, to $18.16 billion in the quarter ended March 31 from $18.68 billion a year earlier.
Analyst on average were expecting revenue of $18.39 billion, according to Thomson Reuters.
With demand for IBM’s legacy hardware and software businesses stagnating, Chief Executive Ginni Rometty has been shifting the company towards areas such as cloud-based services, security software and data analytics.
Revenue from these “strategic imperatives,” as IBM calls them, rose 12% in the first quarter to $7.8 billion. The business accounted for 42% of total revenue, compared to 37% last year.
The company’s net income dropped to $1.75 billion, or $1.85 per share, from $2.01 billion, or $2.09 per share.
Excluding items, IBM (ibm) earned $2.38 per share, beating analysts’ average estimate of $2.35.
The company also said it expects adjusted earnings of at least $13.80 per share for fiscal 2017, reiterating a forecast it gave on Jan. 19.
Since then, the average analyst estimate for earnings per share has risen from $13.74 to $13.78.
Up to Tuesday’s close, IBM’s shares have risen about 2.5% in 2017, less than the roughly 4% rise in the blue chip Dow Jones Industrial Average.