The transition to the cloud is not happening fast enough for slow-moving IBM, which today reported disappointing third quarter results: Revenue of $22.4 billion declined 4 percent year over year and fell short of the Wall Street consensus estimate of $23.37 billion, while per-share earnings of $3.68 missed the consensus by 64 cents.
With the second half of this year now coming in weaker than expected, the company’s outlook has gotten more hazy, so management pulled its 2015 earnings forecast of $20 a share, saying it would provide an updated figure in January.
IBM’s latest numbers have not been well received on Wall Street: the stock today is down 7 percent, earlier hitting a new 52-week low at $166.71.
For the quarter, IBM’s global services revenue of $13.7 billion (61 percent of total revenue) was off 3 percent, while software revenue declined 2 percent to $5.7 billion and hardware revenue dropped 15 percent to $2.4 billion. “We saw a marked slowdown in September in client buying behavior,” said CEO Ginni Rometty.