IBM Misses Estimates in 20th Straight Quarterly Revenue Decline

IBM’s revenue fell short of analysts’ projections, marking a 20th consecutive quarterly decline as growth in new businesses like cloud services and artificial intelligence failed to make up for slumping legacy hardware and software sales, according to Bloomberg.

That sales miss, the first in more than a year, could temper estimates for a return to revenue growth by early 2018. For years, CEO Ginni Rometty has been investing in higher-growth areas and moving away from older products like computers and operating system software. Even as she has shed units to cut costs and made acquisitions to bolster technology and sales, the legacy products are still a drag.

Sales in the first quarter fell 2.8 percent in the first quarter from a year earlier to $18.2 billion, IBM said in a statement. That was a bigger drop than the 1.3 percent decline in the previous quarter. Analysts had expected $18.4 billion on average. The shares fell as much as 4 percent to $163.19 in late trading. They had gained 2.4 percent this year by the end of official trading Tuesday in New York.

IBM is aiming to reach $40 billion in sales in the new businesses, including analytics and security, by next year, which would require about a 21 percent jump from last year. The company said it was ahead of pace to reach that target. Profit, adjusting for some items, was $2.38 a share. Analysts expected $2.35 a share on average.