International Business Machines Corp. said revenue fell for the fourth straight quarter as it struggles to retool its business for the modern computing age, although Big Blue’s profit grew more than Wall Street had projected.
Revenue fell 4.2% from a year earlier to $19.16 billion. Profit rose 3.9% to $2.5 billion, as the company worked to scale back its exposure to businesses with smaller profit margins, The Wall Street Journal reports.
IBM has trailed Microsoft Corp. and Amazon.com Inc. as customers race to do more of their computing in the cloud—online services that free companies from the need to buy and maintain their own systems. As competitors report consistently strong revenue growth, buoyed by sales of their cloud services, IBM has absorbed a string of declines.
While IBM, led by Chief Executive Ginni Rometty, says its cloud business is growing—cloud revenue climbed by 5% in the second quarter—it is far behind the 41% annual cloud revenue growth Microsoft saw in its latest quarter.
Meanwhile, other parts of IBM’s business are in a gradual decline. Revenue in the company’s IT services division fell by 6.7% year-over-year in the second quarter as the company lost sales from lower-margin equipment it is transitioning away from.
The division that houses IBM’s mainframe business also fell almost 20%, although it faced a tough comparison to last year, when the release of a new generation of those computers buoyed sales. Read the full story.