IBM has posted a quarterly revenue decline of 12 percent owing to the effects of the strong dollar.
IBM announced revenues of $19.6bn for Q1 of its 2015 fiscal year. This would have been equal to the $22.5bn that IBM made last year were it not for the effects of the dollar and moves to divest unprofitable parts of the business.
Overall the revenue drove IBM to profits of $2.4bn for the quarter. The company said that this was down five percent on the same period last year, although at that time IBM also reported profits of $2.4bn, suggesting that original figure was raised at some point.
IBM chief executive Ginni Rometty attempted to put a positive spin on the numbers, claiming that Big Blue had a “strong start to the year”.
“Our strategic imperatives growth rate accelerated, demonstrating the power of our offerings in these new opportunities and contributing to improved revenue performance,” she said.
“Our focus on higher value through portfolio transformation and investment in key areas of the business drove continued margin expansion.”
One area where IBM can point to strong growth is the cloud, a market in which it sees its future as the firm pumps huge amounts of cash into services for businesses in this area.
The Q1 results showed that cloud revenues were up 75 percent on the same period last year to $3.8bn, compared with $2.3bn in the first quarter of 2014.
Overall software revenues for IBM in the quarter were down eight percent to $5.2bn, down two percent on the same period last year, based on currency adjustments.
Revenues from IBM’s middleware products, such as WebSphere, Information Management, Tivoli, Workforce Solutions and Rational products, were down five percent to $3.5bn, although this was actually up one percent when discounting currency changes.
Hardware revenues saw a significant decline, caused by IBM selling off its server business to Lenovo. Revenues for this division were $1.7bn in the quarter, down 23 percent on the same period last year.
However, ignoring the divested parts of the business and currency impacts, IBM actually saw profits in hardware increase 30 percent, suggesting that it was right to sell the unit to Lenovo.
Meanwhile, IBM saw revenues for its System z mainframe server products increase by a whopping 118 percent compared with the same period last year. The total delivery of System z computing power, as measured in millions of instructions per second, rose by a strong 95 percent.
However, things were less rosy in the Global Services division, where revenues decreased 12 percent to $12.2bn. Global Technology Services declined 11 percent to $7.9bn, while Global Business Services revenues were down 13 percent to $4.3bn.
Q3 losses reverse Q2 gains
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