The Armonk, N.Y-based International Business Machines Corp.(NYSE:IBM) announced its results on Tuesday as profit plunged 13% in the first quarter despite a progress in the business unit featuring Watson artificial intelligence operations, one of the company’s area Chief Executive Ginni Rometty is counting on to boost the company’s turnaround.
According to International Business Machines Corp.(NYSE:IBM), total revenue dropped for the 20th successive quarter as it bolsters efforts to make up for weakening older businesses with younger ones that are on the rise at a rapid clip.
The PC maker-turned-software giant posted first-quarter net income of $1.75 billion, or $1.85 a share, in contrast with $2 billion, or $2.09 a share, in the year-earlier period.
Excluding one-time items, IBM reported earnings of $2.38 a share, topping the FactSet consensus estimate of $2.35.
Revenue for the three-month period fell to $18.16 billion from $18.7 billion last year, and missed the Street estimate of $18.4 billion. That was despite a 60% improvement in its software-as-a-service business.
The computing giant maintained its fiscal 2017 earnings outlook of at least $13.80 a share. Analysts in the meantime are projecting full-year earnings of $13.77 a share.
“In the first quarter, both the IBM Cloud and our cognitive solutions again grew strongly, which fueled robust performance in our strategic imperatives,” Ms. Rometty said in a press release.
Meanwhile IBM’s trademark businesses, selling hardware, software, and services for customary corporate computing services have been dwindling as customers are adopting cloud computing.
International Business Machines (IBM) has been trying to create new revenue streams in higher-growth areas that it calls “strategic imperatives,” such as cloud computing, AI, security, and cellular technology.
Platforms like Watson, presents commands and functions that software makers can utilize to stitch up artificial intelligence into their programs, are seen as prospective revenue-building prospects for Big Blue.