IBM revenue worse than expected as artificial intelligence fails to make up for slowdown in …

IBM reported a lower-than-expected quarterly revenue on Tuesday, as growth in its higher-margin businesses that include cloud and artificial intelligence services failed to make up for declines across legacy business segments. IBM’s shares fell 3 per cent to $149.15 (£114.41) in after-market trading. New York-based IBM has in recent years shifted focus to pockets of growth across its business — high-margin areas such as cloud, cybersecurity and data analytics — to counter a slowdown in its hardware and software businesses. Revenue from these initiatives, which IBM calls “strategic imperatives,” rose 5 per cent in the second quarter ended 30 June. However, some analysts have expressed concern that IBM’s aggressive investments in areas such as artificial intelligence offering Watson have done little to boost revenue overall. Revenue in IBM’s technology services and cloud platforms business — its largest — fell 5.1 per cent to $8.41bn. Analysts on average had expected $8.58bn, according to financial data and analytics firm FactSet. Revenue in other units including software, hardware and consulting services also declined. Still, IBM backed its forecast for 2017 adjusted earnings of at least $13.80 per share, an expectation some analysts have called too high. Analysts on average expect earnings of $13.68 per…


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