While IBM’s third-quarter net income jumped 6 percent up, the company’s revenue dropped around 4 percent missing the expectations of the Wall Street by near about $1 billion. After the third quarter results were declared, the company’s stock fell around 6 percent in extended trading. The drop in revenue was due to the shrinking sales in big growing hardware markets like China.
The company raked in revenues in tune of $23.7 billion in 2013’s third quarter which is 4 percent lower than Q3 2012 revenue amounting to $24.7 billion. However the tech company managed to earn a profit of $4.04 billion up six percent year-on-year.
Cloud, high-end mainframes and business analytics services are some of the company’s gaining sectors. Major fall of up to 17 percent was recorded in hardware systems revenue – the primary reason being more and more business houses opting for software-based solutions rather than infrastructure purchases.
Mark Loughridge, IBM’s chief financial officer, said that the company’s main growth markets including China, Russia, Brazil and India fell by more than 15 percent and the situation is likely to continue for another couple of quarters.
The company’s cloud services division reported 70 percent growth during the first nine months of 2013 with software division remaining absolutely flat with just one percent growth. Its Technology Services division recorded a four percent decline.
Ginni Rometty, IBM’s chief executive, admitted IBM failed to reach the expectations and said “In the third quarter we continued to expand operating margins and increased earnings per share, but fell short on revenue”.
“Where we had identified high growth opportunities and pursued them aggressively – cloud, mobile, business analytics and security – we continued to show strong growth.”
