IBM reported an 8.5 percent fall in fourth-quarter revenue thanks to the strong US dollar and corporates reducing their IT spending.
Shares of the company, which receives more than half its revenue from markets outside the United States, fell 3 percent in extended trading on Tuesday.
Chief Financial Officer Martin Schroeter said the strong US dollar shaved off $7 billion from IBM’s 2015 revenue and reduced its profit by $300 million in the fourth quarter. He expects currency levels to lower 2016 pretax profit by $1.3 billion.
The dollar index, which rose over nine percent last year, is expected to rise 3.4 percent this year.
IBM has been shifting away from hardware by selling low-margin businesses such as low-end servers and semiconductors to focus on high-growth areas such as security software and data analytics, besides cloud-based services.
Yet the new businesses have so far failed to make up for revenue lost to the selloff.
IBM’s fourth-quarter revenue fell to $22.06 billion in the quarter ended Dec. 31. Analysts on average had estimated $22.02 billion.
Revenue from cloud and mobile computing, data analytics, social and security software, rose about 10 percent in the fourth quarter.
Net income fell to $4.46 billion from $5.48 billion a year earlier.
IBM’s shares have fallen 18.5 percent in the past year.