IBM has posted revenues of $22.5bn for the first quarter of 2014, a decrease of four percent compared with the same period in 2013, while profits slumped to $2.4bn, down 21 percent year-over-year.
The worst-performing area for the company was its Systems and Technology hardware division with revenues down 23 percent year-on-year, underlining the difficult market conditions facing hardware sellers.
In the quarter IBM announced plans to sell its mid-range server business to Lenovo for $2.3bn as part of its strategy shift to rid itself of unprofitable hardware lines.
Big Blue also had to take a $870m hit taken for a “workforce rebalancing charge”. There was better news for its business analytics divisions, with revenues up five percent, while cloud revenue grew by 50 percent, as the firm pushes this as a major new area of its business.
CEO Ginni Rometty said this shift to focus on new areas of customer demand was paying off already and would continue to do so in the long term.
“In the first quarter, we continued to take actions to transform parts of the business and to shift aggressively to our strategic growth areas including cloud, big data analytics, social, mobile and security,” she said. “As we move through 2014, we will begin to see the benefits from these actions. Over the long term, they will position us to drive growth and higher value for our clients.”
IBM has been touting cloud and big data as key areas for its future for several months, as it looks to take its Watson supercomputer to the masses and outlines major investment plans in cloud tools including more data centres in several key regions.
The results come hot on the heels of Google revealing improved profits and revenues. However, investors were wary of the results as the average cost-per-click metric fell by nine percent.
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