Revenues of the world’s largest technology services company fell 4.6 percent to $18.68 billion in the first quarter, but beat analysts’ average estimate of $18.29 billion.
It was the 16th straight quarter of revenue decline for IBM.
Chief Executive Ginni Rometty had been banking on cloud-based services, security software and data analytics, while trimming its traditional hardware business by exiting low margin businesses.
It looks like this new revenue is not cutting the mustard and is failing to make up for declines in its traditional segments. This is mostly because the falloff in IBM’s traditional businesses was dwarfing the company’s ability to capture new revenue.
To be fair the new businesses such as includes cloud and mobile computing, data analytics, social and security software, rose about 14 percent in the first quarter. But revenue from the services fell 4.3 percent and hardware slumped by 21.8 percent.
Big Blue did better than Wall Street expected, helped by a $1 billion refund in the quarter that lowered its effective tax rate to a negative 95.1 percent compared with 19.5 percent last year.
The company maintained its full year adjusted earnings guidance of at least $13.50 per share. Analysts on average were expecting $13.55.