IBM sales continued to move down. In the second quarter, the net income fell by seven percent to 2.3 billion dollars (2.0 billion euros), according to the group on Tuesday after the US stock market closing. Revenue fell by five percent to $19.3 billion.
The continuing weakness in the traditional PC business has led to shrinking revenues for 21 quarters, although there are strong growth in some sectors. Investors reacted disappointedly to the figures, although the profit was above expectations. The share lost more than two percent after-hours.
IBM has been trying to get the benefit from a restructure. CEO Ginni Rometty plans to transform the company from the traditional software provider into a modern IT service provider with cloud services, data analysis, artificial intelligence and security software. However, although the cloud business is flourishing, the change has not been as hoped.
The former computer manufacturer, which in recent years mainly focused on IT services, posted sales of 19.3 billion dollars. That is 5 percent less than a year earlier and had proved less than analyst estimates. Among the earnings remained about $2.3 billion, which is equivalent to a decline of 7 percent.
“In the second quarter, we strengthened our position as the enterprise cloud leader and added more of the world’s leading companies to the IBM Cloud,” Rometty said in a statement. “We finished the first half of the year where we expected,” added chief financial officer Martin Schroeter in his own.
Sales of technology services and cloud platforms, dropped more than 5 percent, even though the company itself had previously announced improvements just for this segment.
IBM has long been struggling with declining sales and profit in fact, according to experts, but not to turn the tide. Berkshire Hathaway, the investment by the famous billionaire investor Warren Buffett, has increased its stake in IBM last month.
Still, IBM maintained its annual forecast for adjusted EPS of about $13.80 per share, a guidance some analysts have called too high. Analysts on average are looking for EPS of $13.68 per share.
The release of its new mainframe server is considered a major step in cybersecurity initiatives and new deals in the second half of 2017 are likely to benefit the tech giant, CFO said on a conference call.