International Business Machines Corp on Tuesday reported its worst quarterly revenue in 14 years, but it still beat analysts’ estimates as the company’s shift to high-growth areas such as cloud-based services begins to yield results.
Under chief executive Ginni Rometty, IBM has been moving towards areas such as cloud-based services, security software and data analytics while trimming its traditional hardware business by exiting low-margin businesses.
The company’s revenue fell 4.6% to $18.68 billion in the first quarter ended March 31, but analysts had on average estimated $18.29 billion revenue for the period.
The company posted its 16th straight quarter of revenue decline.
Revenue from “strategic imperatives”, which include cloud and mobile computing, data analytics, social and security software, rose about 14% in the first quarter. Cloud revenue increased 34%.
Excluding items, IBM earned $2.35 per share, also beating the average analyst estimate of $2.09.
The company maintained its full-year adjusted earnings guidance of at least $13.50 per share.
Up to Monday’s close, IBM’s shares had risen 10.83% this year, compared with the 2.46% gain in the S&P 500 index.