ENTERPRISE TECHNOLOGY GIANT IBM posted worse than expected financial results for the third quarter, with a four percent drop in revenues thanks to dwindling hardware sales and a weak market in China.
In its third quarter financial results released on Wednesday, IBM posted revenues of $23.7bn (£14.6bn), down four percent compared to the same quarter last year. Wall Street analysts had expected revenues of $24.74bn, $1bn above the figure reported by IBM.
The drop in sales was mainly apparent in growing markets such as China, as well as due to a still shrinking hardware market, which dropped by 17 percent as more businesses avoided making infrastructure purchases.
The firm's growth markets, which include China, Brazil Russia and India, fell by 15 percent, a sales slump that IBM CFO Mark Loughridge said would continue for "another couple of quarters".
However, it's not all bad news for Big Blue. The hardware giant posted profits of $4bn (£2.4bn), up six percent from the same period last year.
IBM also reported 70 percent growth in its cloud product sales for the first nine months of 2013, with software overall remaining relatively flat in terms of growth, at one percent.
IBM CEO Ginni Rometty admitted the firm had failed to reach expectations in terms of revenue, but highlighted the growth in areas that IBM sees as safe bets for the future.
"In the third quarter we continued to expand operating margins and increased earnings per share, but fell short on revenue," she said. "Where we had identified high growth opportunities and pursued them aggressively - cloud, mobile, business analytics and security - we continued to show strong growth.
"This underscores our strategy to continuously transform the company to high value. We are taking action to improve execution in our growth markets unit and in the elements of our hardware businesses that are underperforming." µ
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