NEW YORK: International Business Machines Corp (IBM) reported its 19th straight quarter of declining revenue, but forecast full-year earnings above Wall Street estimates due to growth in newer areas such as cloud-based services and analytics.
However, investments to drive growth in the cloud business and the company’s shift to a subscription-based as-a-service model hit its operating gross margin by 1.8 percentage points to 51 per cent in the fourth quarter. IBM’s shares were down 2.5 per cent at $162.70 after rising briefly in extended trading. CFRA Research analyst David Holt said the company’s results still raised questions as to when revenue would grow.
“The 800-pound gorilla in the room is the overall inflection point towards revenue growth. That’s the moving target,” Holt said. IBM forecast adjusted earnings of at least $13.80 per share for fiscal 2017, beating the average analyst estimate of $13.74, according to Thomson Reuters I/B/E/S. — Reuters
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