IBM reported a fifth consecutive quarter of falling sales, with the company’s legacy information-technology business holding back Chief Executive Ginni Rometty’s efforts to revive growth through the $34 billion acquisition of software giant Red Hat.
IBM on Wednesday reported sales of $18.03 billion, below analysts expectations and trailing the $18.76 billion it posted in the year-prior period, The Wall Street Journal reports. Shares slumped 6% in after-hours trading.
The revenue decline was IBM’s 27th overall under Rometty, who has struggled to adapt the more than century-old company to a changing global IT landscape since taking the reins in 2012.
The company’s closely watched adjusted earnings per share fell to $2.68, but came in slightly higher than analysts’ forecasts of $2.66.
With Red Hat, IBM hopes to gain a dominant role in what it terms “the hybrid cloud.” The company is betting that many business haven’t yet migrated their data to the cloud and that many will choose a so-called hybrid model, which IBM has focused on, where data storage relies on a mix of in-house and rented computers. Red Hat sells support and training for software that aims to work seamlessly in the cloud and on-site, which IBM sees as a critical in a hybrid-cloud world. Read the full story.