NEW YORK (AP) — IBM's first-quarter earnings fell and revenue came in below Wall Street's expectations amid an ongoing decline in its hardware business, one that was exacerbated by weaker demand in China and emerging markets.
The world's largest technology services company has been working to expand into new areas as its hardware business falters, but the latest results show that these efforts have yet to fully pay off.
The company in the process of selling its low-end server business to China's Lenovo Group as it continues to shift its focus toward more lucrative software and services. It is also investing heavily in Internet-based computing services and in Watson, its cognitive computing operation made famous in beating a pair of "Jeopardy!" champions.
IBM Corp. said Wednesday that it earned $2.38 billion, or $2.29 per share, in the January-March period. That's down 21 percent from $3.03 billion, or $2.70 per share, a year earlier. Excluding an $870 million charge for reorganizing its work force and other one-time items, IBM's earnings were $2.54 per share in the latest quarter, matching analysts' expectations.
Revenue fell 4 percent to $22.5 billion, below the $22.9 billion that analysts polled by FactSet had expected. It's the eighth consecutive quarter of revenue decline. The biggest drop was in its systems and technology unit, or hardware, where revenue tumbled 23 percent to $2.39 billion from $3.11 billion.
IBM's stock fell 4 percent after the results came out.
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