International Business Machines Corp took another hit in the latest quarter as the company switches its focus to cloud computing technology.
IBM said on Tuesday that revenue fell 12% to $24.1 billion in the three months ended December 31, marking the eleventh consecutive quarter of declines for the company. Revenue was lower than the $24.8 billion analysts had estimated.
Net income for the quarter stood at $5.48 billion, or $5.51 earnings per share, compared to $6.19 billion, or $5.73 a share, a year earlier. Excluding some items, per-share earnings were $5.81. Analysts polled by Thomson Reuters estimated earnings per share of $5.41 on $24.77 billion revenue.
The company also said it expect per-share profit for 2015 to range between $15.75 and $16.50, slightly below the average analyst forecast of $16.51. Last October IBM gave up on a target of $20 per share during the year.
IBM has been heavily investing in “strategic imperatives”, which includes cloud, analytics, mobile, social and security businesses. The group grew 16% to $25 billion during the recent quarter and accounted for 27% of overall revenue. IBM said the businesses are expected to reach double-digit growth in 2015.
IBMs mobile business was a top contributor with a 200% increase, followed by clouds 60% increase, security, which edged up 19%, and analytics with the modest 7%. Meanwhile, the companys hardware business fell 39% to $2.4 billion during the quarter.
Recently IBM launched an upgraded version of its mainframe computer as a counter measure to declining sales in its hardware unit.
“We are making significant progress in our transformation, continuing to shift IBM’s business to higher value, and investing and positioning ourselves for the longer term,” Chief Executive Officer Ginni Rometty said in a statement.
The company, which is most famous for its big mainframe systems, has been slowly shifting away from hardware products and focusing on the cloud. Continuing that trend, in 2014 IBM sold its System X server business to Lenovo for $2.1 billion and handed over its semiconductor manufacturing business to Globalfoundries.
IBM said that those actions combined with a stronger dollar hurt performance in the fourth quarter. The recent increase of the dollar against the euro and a number of other currencies decreased the value of IBMs revenue generated outside the US.
IBM fell 0.12% on Tuesday and closed at $156.95 in New York, marking a one-year decrease of 17.43%. The company is valued at 155.33 billion.
According to CNN Money, the 24 analysts offering 12-month price forecasts for IBM have a median target of $166.00, with a high estimate of $198.00 and a low estimate of $125.00. The median estimate represents a 5.77% increase from the last close price.
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