IBM revenue hurt by strong dollar, tight IT budgets
By Nicola Leske
(Reuters) - IBM posted a quarterly revenue miss and barely beat analyst expectations for earnings per share as customers put off spending on big ticket items and a stronger dollar hit the company's top line.
Businesses and governments are holding back on spending on information technology amid economic uncertainty in Europe and ahead of U.S. elections next month.
International Business Machines Corp, which has shifted its focus to higher-margin software and services from tech products, said on Tuesday that earnings per share, excluding items, were $3.62, just beating average analysts' estimates of $3.61.
Excluding a $160 million charge related to UK pension fees net income fell slightly to $3.82 billion from $3.84 billion a year ago while net income, excluding acquisition costs, rose 5 percent to $4.2 billion.
Revenue eased 5 percent to $24.7 billion due to a negative currency impact of almost $1 billion. Wall Street had expected a decline in revenue by about 3 percent to $25.36 billion.
"If you look at the third quarter performance, we did start off the first two months of the quarter on a stronger trajectory than we saw for the full quarter," Chief Financial Officer Mark Loughridge said on a call with analysts.
He added "a handful of deals ... fell out of the quarter" which the company had thought were secure.
The CFO also said that several large countries had disappointed with Mexico and Australia "both down double digits." Continued...