IBM revenue misses Street hit by weak China demand
By Supantha Mukherjee and Soham Chatterjee
(Reuters) - IBM, the world's largest technology services company, reported quarterly revenue that missed estimates for the fourth straight quarter, due to a steep fall in demand for servers and storage products in emerging markets such as China.
International Business Machines Corp shares fell 3.5 percent to $181.68 in after-hours trade.
Chief Executive Ginni Rometty said she and her team would forego their annual incentive payments for 2013, as IBM failed to grow revenue, especially in growth markets such as China.
Revenue in IBM's hardware business, which includes server and storage products, fell for the ninth straight quarter as more companies switch to cloud computing services from traditional IT infrastructure.
IBM's revenue also took a hit in emerging economies as a backlash against U.S. government spying contributed to plummeting demand. Asia-Pacific revenue fell 16 percent, while that from Brazil, Russia, India and China fell 14 percent in the quarter.
"Their growth markets were everything but growth," Forrester analyst Andrew Bartels said.
"They have had quite a bit of success with sales of hardware in these emerging markets, but these markets are not doing well. They're facing competition in those markets," Bartels said.
IBM, however, forecast full-year 2014 adjusted profit that beat analysts' expectations and also affirmed its 2015 target for operating earnings of at least $20 per share. Continued...