IBM sales dip 12 per cent despite lift from new mainframe

It was IBM's 12th straight quarter of declining revenue

IBM's z13 mainframe started shipping in March

IBM's z13 mainframe started shipping in March

IBM reported a 12 per cent drop in revenue for the last quarter despite a big boost from its new z13 mainframe, which went on sale last month.

Revenue for the quarter ended March 31 was $US19.6 billion, with profit down 5 per cent to $US2.4 billion, IBM announced Monday.

Two-thirds of the company's business comes from overseas, and the strong US dollar weighed on its results. Without the currency impact, and adjusting for businesses that IBM recently sold off, revenue would have been flat from a year ago, CFO Martin Schroeter said on IBM's earnings call.

Like its rival Hewlett-Packard, IBM has been watching its business shrink for several quarters as customers spend less on expensive hardware and IT services and devote more to cloud computing and mobile.

HP is trying to address the problem by splitting itself into two companies, while IBM has been selling off divisions that produce little profit, like its x86 server division, and investing in areas where it hopes to find growth.

On Monday, it said revenue from those "strategic imperatives," which include the Cloud, analytics and mobile, increased more than 20 percent from a year earlier. But it's not enough to offset declines elsewhere.

Even allowing for the currency effects, sales fell 2 per cent in IBM's global services division, to $US12.2 billion, and 2 per cent in its software division, to $US5.2 billion.

Its hardware unit got a lift from new products. Revenue from mainframes more than doubled from a year earlier, and even IBM's Power servers division reported some growth, Schroeter said. The company will finish rolling out its new Power 8 chip across all servers this quarter, he said.

Still, revenue from IBM's hardware division was down 23 per cent from last year, to $US1.7 billion.

IBM is investing heavily to catch up in other areas, including spending $US3 billion to create a new Internet of Things division. It's also betting on new analytics services that use its powerful Watson supercomputer, and mobile services developed with Apple.

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags business issuesIBMfinancial results

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

James Niccolai

IDG News Service
Show Comments

Father’s Day Gift Guide

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?