International Business Machines Corporation (IBM) revenues have been falling for ten quarters straight, and has again reported sharply lower profit for the third quarter of this year as well. IMB’s CEO, Virginia Rometty has admitted to be disappointed by the result, while noting that customer spending has slowed down seriously in September. She considers that this decline in revenues and profits indicate a change in the technology industry at a pace never encountered before.
IBM shares fell by 8.4% in early trading, to a level lower than any time in the last three years. The fall – preceded by another fall of 7% – have contributed to the decline of the Dow Jones Industrial Average. The company has acknowledged that it won’t meet its goal of generating at least $20 in revenues per share next year, a forecast it has maintained for the last five years under two different CEOs – the first time in 2010, under CEO Samuel Palmisano, who has pledged to double the company’s earnings to $20 per share by 2015 by a more aggressive business in software and in the emerging markets.
Although IBM has pursued areas with lots of potential, like big data analytics and cloud outsourcing services, it has encountered serious competition, and hasn’t been able to offset the slowing down of its hardware and other computing services departments. Skepticism over the company’s ability to reach the goals set in 2015 has been growing for years. Daniel Ives, analyst at FBR Capital Markets (cited by the Wall Street Journal) has compared IBM’s efforts to selling old Humvee models while the customers are buying Tesla, criticizing the Big Blue’s ability to change their strategy according to the evolution of the market.