IBM’s Q2 sales slide 13% on sale of low-end server unit
Revenue for its second quarter was $20.8 billion (€19.1 billion), down from $24 billion (€22.1 billion) a year earlier, IBM has announced.
The big drop is partly from IBM selling its x86 server business to Lenovo, as well as the impact of the strong US dollar. Without those factors, revenue would have declined 1%, IBM said.
Net income was $3.45 billion (€3.2 billion), down 16.6%.
Revenue from IBM’s giant Global Technology Services segment were down 10% to $8.1 billion (€7.5 billion). Factoring out the currency effect and the sale of the x86 server business, revenues were up 1%, IBM said.
Hardware revenue slumped 32% to $2.06 billion (€1.9 billion), though without the x86 declines and the currency impact, hardware sales were up 5%.
They were helped by IBM’s mainframe business, which had been expected to be do well because IBM released the new z13 mainframe just a few months ago. Mainframe sales were up 9% last quarter, IBM said, and would have been up 15% less the currency impact.
Revenue from what IBM calls its “strategic imperatives,” or areas it has identified as critical to growth, were up more than 20% from last year. Those areas are cloud, analytics and “engagement” products.
Most big US multinationals have seen their sales crimped this year by the strong dollar, which can make products more expensive to customers paying with relatively weaker currencies.
James Niccolai, IDG News Service