Big Blue Reveals Sluggish Third Quarter Performance

IBM has posted disappointing financial figures with revenue falling more than expected and profit forecasts cut.

A strong US dollar leading to a fall in demand from China and other emerging markets is being blamed for the figures, but this is now the 14^th successive quarter in which IBM has recorded a drop in revenue.

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In total, the company’s revenue fell 13.9 per cent to $19.28 billion for the third quarter and it also lowered its operating profit forecast for 2015 to $14.75 to $15.75 per share compared with initial estimates of $15.75 to $16.50. Its net income from continuing operations also fell from $3.46 billion twelve months ago to $2.96 billion.

As well the reduction in the number of deals taking place with emerging markets, IBM has also struggled to replace its less lucrative business sectors with cloud products and services. In an interview with Reuters, Martin Schroeter, IBM’s chief financial operator, explained that the firm’s consulting and storage businesses were not yet developed enough to make up for a loss of revenue from hardware products.

Looking to the future, IBM is hoping to enhance its newly created health analytics unit with the purchase of Merge Healthcare, a medical imaging company, for $1 billion. It is also focusing on so-called “strategic imperatives,” such as cloud computing, mobile resources, data analytics and security software.

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IBM will be hoping that the development of its high-margin cloud computing initiatives will lead to more promising financial results in the future. As of early this week, IBM’s shares had fallen approximately seven per cent throughout the year.