IBM shares plunge on YoY revenue dip
Big Blue struggles amid third-platform facelift
IBM Corp’s shares plummeted 7.3% to $168.73 following its reported 4% in quarterly revenues, Reuters reported.
Third-quarter revenue stood at $22.4bn, compared with $23.34bn in Q3 2013, while net profit dropped to $3.46bn, or $3.46 per share, from $4.14bn, or $3.77 per share in Q3 2013.
"We are disappointed in our performance," said CEO Ginni Rometty in a statement. "We saw a marked slowdown in September in client buying behaviour, and our results also point to the unprecedented pace of change in our industry."
IBM is in the midst of offloading its low-end server business to China’s Lenovo Group and has also reached an agreement to pay Globalfoundries $1.5bn in cash over three years to take the company’s chip unit. IBM took a Q3 pre-tax charge of $4.7bn related to the deal.
The Lenovo and Globalfoundries deals are part of IBM’s move into third-platform business models that concentrate on revenues from areas such as cloud, mobile security and big data analytics. Earlier this month, the Financial Times reported that IBM is set to invest heavily in its advanced analytics platform Watson.