Arik Hesseldahl

Recent Posts by Arik Hesseldahl

IBM Profits Beat Expectations, but Sales Fall Short Again

Shares of computing and service giant IBM are falling in after-hours trading as the company’s latest quarterly results beat the expectations of Wall Street analysts on the bottom line, but fell short on the top line.

IBM’s earnings were $3.99 a share versus a consensus of $3.96, and amounted to a rise of about six percent over the year-ago quarter. Revenue was $23.7 billion, more than $1 billion short of the expected $24.8 billion. IBM shares fell by more than $11, or more than six percent, in after-hours trading.

It was the sixth straight quarter for a decline in sales at Big Blue. Sales fell two percent year on year after adjusting for currency effects. The drop was led by a contraction in sales in its Systems and Technology business — mostly hardware — which fell 16 percent after adjusting for currency effects. Sales of Power Systems, IBM’s line of Unix servers — a market where it competes with Hewlett-Packard and Oracle — fell 38 percent.

Demand in international markets, long an IBM strength, fell as well. Sales in those markets — which IBM calls its growth markets — fell by nine percent, and sales in the BRIC countries — Brazil, Russia, India and China fell 15 percent.

Revenue in the Global Technology Services segment fell one percent after adjusting for currency, and the business services segment was flat. Software sales increased by about two percent.


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik