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International Business Machines Corp. (NYSE:IBM) the blue-chip, bell-weather company of the global IT industry until a few decades ago, continues to mark its transition to a new age technology company with low profits. The company has been painfully slow in shifting its focus from the Personal Computer market to the latest technologies, namely, cognitive computing. IBM has skipped the mobile computing revolution during the first decade of 2000s entirely, making it tough for it to jump to the cloud computing bandwagon during the years after post 2010.
While it is now turning the corner with a sheave of cloud computing products and services, it yet needs to do more to dominate the technology financial markets, as its latest quarterly earnings result clearly demonstrated.
IBM Profits low
International Business Machines Corp. (NYSE:IBM) revenue for the third quarter was $19.3 billion, a 14% decline and more alarmingly the 14th consecutive decline in quarterly sales numbers. The company had more worries to offer its investors. Based on the current performance, it has had to downwardly revise its full-year Profit forecast. As against earlier expectations of $16.50, the profits are set to be lower by over $0.50. The expected full-year profit, therefore stands at, $15.75, sending the shares of the company tumbling by over 5.8% on Tuesday during New York trading hours. The share price of $140.64 at closing was the lowest price at which the company has closed in the past 5 years or October 2010.
Expensive Transition To Data and Cloud
International Business Machines Corp. (NYSE:IBM) is marking its transition to the new business model of subscription-based revenue for software and services with painful financial limitations. The move to become the dominant player in cloud computing as well as data analytics has been slow because of the sheer size. With over 380,000 employees, elongated sales cycles for software and businesses, quarterly earnings have felt the impact.
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