IBM's China-driven slump sparks executive shakeup
By Soham Chatterjee and Edwin Chan
(Reuters) - IBM Corp has reassigned the head of its growth markets unit, a source with knowledge of the move said, after a surprisingly steep drop in quarterly hardware sales in China prompted a 7 percent share slide on Thursday.
James Bramante's reassignment was first flagged during the company's conference call on Wednesday, when Chief Financial Officer Mark Loughridge said sales chief Bruno Di Leo would be taking over at the unit, which oversees growth markets for the company.
"They know how to get this done," Loughridge told analysts on the call, referring to Di Leo and his team. "They helped build this to begin with."
IBM declined to comment, and the source did not say where Bramante would be reassigned.
The shakeup comes amid concerns that International Business Machines Corp, which is moving steadily into higher-margin businesses such as software and cloud computing, is struggling to sustain growth through its emerging markets business.
The company reported a worse-than-expected 4 percent dip in third-quarter revenue, its sixth straight quarterly decline.
Much of that came from a 17 percent slide in overall hardware. Profitability in that business has declined by $1 billion so far this year.
At least eight brokerages cut their price targets on the stock by as much as 9.5 percent to between $160 and $220, while analysts at UBS Investment Research downgraded the stock to "neutral" from "buy. Continued...