Shares fell more than 7% in the previous month to $ 134.95, down 70 points from the Dow Jones Industrial Average. The decline triggered IBM's 2.8% rise on Tuesday and then some, and this level would be the lowest closing price of the year. The share has fallen more than 11% since the beginning of the year.
Shortly after the closing bell, IBM reported adjusted profit that outperformed the Wall Street forecast. However, the year-over-year decline of 2.1% served as a reminder of the company's years of struggle to abandon its image as a computer manufacturer and focus on fast-growing companies such as cloud computing and artificial intelligence services. 19659003] For years, General Manager Ginni preached Rometty patiently as the company worked through its turnaround. IBM finally reached when it came in January, reported for the first time in 23 quarters higher revenue and signaled further growth.
Tuesday's report showed that there is more to do. "Another typical IBM quarter," wrote Stiff Financial Corp. analyst David Grossman in a research note with some good and some not so good results. Revenue was in line with the company's flat expectations, while service continued to improve and software was weaker than expected.
Overall, IBM posted a $ 1
The report also showed that IBM generated less than half of its quarterly revenue. A closely-watched group calls it strategic imperatives, which include cloud computing, data analytics, and other fast-growing businesses. Three months ago, the company reported for the first time that it generated more than half of its revenue from strategic targets.
Three years ago, IBM said these companies expect $ 40 billion in revenue this year. Kavanaugh said these companies are well on their way to meeting.
Wedbush analyst Moshe Katri said in a statement Tuesday that IBM has not shown consistent growth in such strategic areas.
Profit fell 1.2% to $ 2.69 billion. Excluding some acquisition-related charges and retirement benefits, IBM earned $ 3.42 per share. Analysts expected adjusted earnings of $ 3.40 per share. Kavanaugh tried to dispel worries about the company's Monday call with analysts, pointing out IBM's growing margins in its service businesses and the long-term growth of its strategic imperatives. IBM maintained its expectation that profits for the full year would reach at least $ 11.60 per share.
Despite the decline in IBM's stock, some investors are unwilling to terminate by a setback alone.
That does not change our position at IBM, "said Charles Robinson, founder and chief investment officer of Robinson Value Management Ltd., which invested approximately 3% of its equity portfolio of approximately $ 90 million in June "IBM will not set the world on fire, it will not be the next Apple, but they have solid businesses that are stable and improving."
-Sarah E. Needleman contributed to this article.