IBM has reported a lower profit for the first quarter, with net income falling by 1pc as a result of delays in several of the technology company’s large software and mainframe computer deals.
IBM’s total revenues for the quarter dropped 5pc to US$23.41bn from US$24.67bn a year ago.
IBM shares fell by almost 5pc in after-hours trading, as earnings and revenue missed analysts’ expectations.
The company said it earned US$3.03bn, or US$2.70 per share, for the first quarter, below Wall Street’s expectations of US$3.05 per share. That figure was down 1pc from US$3.07bn, or US$2.61 per share, for the same period a year earlier.
IBM’s chief executive Ginni Rometty said that while the company grew operating net income in the first quarter, ‘Big Blue’ did not achieve all of its goals
“Despite a solid start and good client demand, we did not close a number of software and mainframe transactions that have moved into the second quarter,” she said.
Rometty added that IBM’s services business performed as expected for the quarter, with strong profit growth and “significant” new business.
“Looking ahead, in addition to closing those transactions, we expect to benefit from investments we are making in our growth initiatives and from the actions we are taking to improve under-performing parts of the business,” she said.
As part of its restructuring plans, IBM is reportedly in talks to sell its low-end server division to Lenovo.
A report on The Wall Street Journal suggests that IBM is in talks to sell its x86 server business to Lenovo in a deal that could be worth billions of dollars.