While IBM is quickly advancing in cloud computing, data analytics, mobile applications, the revenue of the tech company fell for the 13th quarter consecutive.
However, considering the recent efforts to boost advance in these fields, Q2 showed promising progress. Overall, IBM encountered issues in translating Q2 growth in a break for the 12 quarters that the company’s revenues fell.
If we look back, the chief exec of IBM, Virginia M. Rometty had already stated that in 2015 the tech company will be faced with the challenges of new innovative approaches and initiatives. Indeed, that is mirrored in IBM’s Q2.
On the bright side, the strategic initiatives envisioned by IBM brought a 30 percent increase in revenue. At a closer look, that meant 70 percent revenue increase in the cloud computing sector, and a 20 percent revenue increase in the data analytics sector. Currency fluctuations were accounted for.
Nonetheless, IBM’s overall revenue and consequently profit fell. The software sector fell by 10 percent during the same quarter. 3 percent if the currency impact is not taken into account. Overall, revenue from this sector fell to 5.8 million dollars.
Analysts’ expectations were not met, with some arguing that the legacy of IBM is currently facing a lot of pressure. Understandable if we take into account that investments are rolling and so the profits decline.
The future brings better perspectives. The new sectors of investment seem to be on the rise. But the old ones are not shrinking at the same rate. So a crossover is the turnpoint the analysts are waiting for to account for the company’s future.
During Q2, the revenue dropped by 13 percent, 9 percent being accounted for by the currency effect. 4 percent of the revenue fall stemmed from IBM selling the low-profit unit responsible for industry-standard computers design to Lenovo during 2014.
The net income decline was reported at 3.5 billion dollars, while the revenue expected by Wall Street analysts was set at 20.9 billion dollars.
Earning per share delivered 3.84 dollars, above the expected 3.78 dollars per share.
Photo Credits businessinsider.com/
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