IBM Reports Y-o-Y Revenue Decline for the Third Consecutive Quarter

Compared to the year-ago quarter, IBM’s revenue reduced 5% in the first quarter of 2019.

US computer hardware company, IBM has reported its earnings results for the first quarter of 2019. After announcing that the company earned less revenue during the quarter, its shares dropped around 4%. As per a statement by the company, revenue was down approximately 5% compared to the previous year’s quarter. This is the third consecutive time that the company has reported quarterly revenue decline year over year. The company also had previously reported annualized revenue drops that it experienced during 22 consecutive quarters. The streak of revenue declines ended in 2017.

Q1 2019 Revenue: $18.18 Bn, compared to analyst expectation of $18.46 Bn

Q1 2019 Earnings: $2.25 per share (excluding certain items) compared to analyst expectation of $2.22 per share

“IBM’s cloud revenue growth accelerated in the first quarter, and the company grew again in high-value, key areas in consulting and cognitive and cloud software. Coupled with IBM’s commitment to security and trust and its industry expertise, the company’s investments in innovative technologies position it well to help clients move to their digital reinvention’s second chapter,” said President, Chairman, and CEO of IBM, Ginni Rometty (source).

In January 2019, the company announced that Mr. Cooper Group has signed an agreement for the acquisition of IBM’s mortgage servicing business. In the next month, it announced that it will wind down its OEM IT commercial financing operations by the end of this year. For the entire year 2019, the company repeated its guidance of minimum earnings per share of $13.90 (excluding certain items). Analysts had expected the company to announce a slightly higher figure, i.e. $13.91.

IBM reported revenue of $6.88 Bn earned in its Global Technology Services segment. The revenue of the biggest segment in the company’s new reporting structure was down 7% Y-o-Y. The segment includes technology support services and cloud and infrastructure services. Revenue in the Systems segment was down 11%, and it reached $1.33 Bn. The Global Business Services segment earned a flat revenue of $4.12 Bn. For the Cloud and Cognitive Software segment, the company reported revenue that was down 1.5%, reaching $5.04 Bn. The impact of the IBM Z product cycle dynamics had offset the growth of the Systems segment, an IBM spokesperson said.

IBM did not talk about the contribution of its strategic imperatives to the company’s total revenue. For cloud delivered as a service, its annual exit revenue run rate was up 10% and reached $11.7 Bn, the company announced.