All the latest UK technology news, reviews and analysis

IBM sees 70 percent increase in cloud earnings, but hardware continues decline

17 Oct 2013
IBM logo

IBM's shares have taken a six percent tumble after the firm posted worse than expected financial results, with a four percent drop in revenue. The drop in sales was mainly apparent in growing markets such as China, as well as a continually shrinking hardware market.

In its third quarter 2013 results, Big Blue posted $23.7bn revenues, down 4 percent compared to Q3 2012, and a $4bn profit, up six percent on the same period of 2012. The firm saw significant gains in areas such as its cloud, high-end mainframes and business analytics services.

Major falls came in hardware systems revenue, which dropped by 17 percent as more businesses opt for software-based solutions rather than infrastructure purchases. High-end System z mainframe servers continued to show growth, bucking the overall hardware trend for another quarter with six percent growth.

The firm's growth markets, which include Brazil, Russia, India and China, fell by 15 percent, a figure which IBM's chief financial officer Mark Loughridge said would continue for "another couple of quarters".

The company reported 70 percent growth on its cloud products for the first nine months of 2013, with software overall remaining relatively flat in terms of growth, at one percent. Its Technology Services division saw a decline of four percent.

IBM chief executive Ginni Rometty admitted her firm had failed to reach expectations in terms of revenue, but highlighted the growth in areas which IBM sees as safe bets for the future.

"In the third quarter we continued to expand operating margins and increased earnings per share, but fell short on revenue," she said. "Where we had identified high growth opportunities and pursued them aggressively – cloud, mobile, business analytics and security – we continued to show strong growth.

"This underscores our strategy to continuously transform the company to high value. We are taking action to improve execution in our growth markets unit and in the elements of our hardware businesses that are underperforming."

Last quarter, IBM suffered at the hands of significant layoffs, which ate into its profit margins as it looked to restructure its business for future trends.

  • Comment  
  • Tweet  
  • Google plus  
  • Facebook  
  • LinkedIn  
  • Stumble Upon  
Michael Passingham

Michael Passingham joined V3 as a reporter in June 2013. Prior to working at V3, Michael spent time at computing magazine PC Pro. Michael covers IT skills, social media, tech startups and also produces V3's video content.

View Michael's Google+ profile

More on Finance
What do you think?
blog comments powered by Disqus

Tech gifts for Christmas 2014

Is a new tablet on your wish list this festive season, or have they become yesterday’s fad?

Popular Threads

Powered by Disqus
iPhone 6 is available in silver gold and space grey

iPhone 6 video review

The best iOS handset to date

Updating your subscription status Loading

Get the latest news (daily or weekly) direct to your inbox with V3 newsletters.

newsletter sign-up button

Getting started with virtualisation

Virtualisation can help you reduce costs, improve application availability, and simplify IT
management. However, getting started can be challenging


Converting big data and analytics insights into results

Successful leaders are infusing analytics throughout their organisations to drive smarter decisions, enable faster actions and optimise outcomes

1st Line Support Analyst - Temp

1st line support analyst required for a leading financial...

System on Chip (SoC) Development Technical Lead, Stafford, 45,000

System on Chip (SoC) Development Lead Engineer, Stafford...

Electronics Design Engineer, Redditch, 25,000-35,000

Electronics Design Engineer, Redditch, £25,000-£35,000...

Electronics Design Engineer, Nottingham, 40,000

Electronics Design Engineer, Nottingham, £40,000 I...
To send to more than one email address, simply separate each address with a comma.