IBM reports revenue declines for three straight quarters; shares fall 2.7%

Topics IBM | IT sector | Red Hat

Reporting sales declines for three straight quarters, IBM has posted $17.6 billion in revenue in the third quarter of this year, compared to $18 billion for the same period last year.

The company's shares fell 2.7 per cent in extended trading on Monday after third quarter results were announced.

However, its Cloud and cognitive software revenue rose seven per cent in the quarter.

For the third quarter, total cloud revenue reached $6 billion, an increase of 19 per cent.

"The strong performance of our cloud business, led by Red Hat, underscores the growing client adoption of our open hybrid cloud platform," IBM CEO Arvind Krishna said in a statement.

IBM acquired enterprise software company Red Hat last year for $34 billion.

Red Hat revenue for the quarter increased 17 per cent, said IBM which earlier this month announced that it will separate its managed infrastructure services unit of its global technology services division into a new public company.

"Separating the managed infrastructure services business creates a market-leading standalone company and further sharpens our focus on IBM's open hybrid cloud platform and AI capabilities," the IBM CEO said.

"This will accelerate our growth strategy and better position IBM to seize the $1 trillion hybrid cloud opportunity," he added.

The company's third quarter results showed that global business services which include consulting, application management and global process services posted revenues of $4 billion, down five per cent driven by declines in application management and consulting.

Its global technology services revenues hit $6.5 billion, down four per cent, the company said.

 

"In the third quarter we continued to deliver strong gross profit margin expansion, generated solid free cash flow and maintained a sound capital structure with ample liquidity," said James Kavanaugh, IBM Senior Vice President and Chief Financial Officer.

"We have the necessary financial flexibility to increase our investments in hybrid cloud and AI technology innovation and skills, while remaining committed to our long-standing dividend policy."

--IANS

gb/na


(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel