ARMONK, N.Y. (AP) – IBM’s fourth-quarter net income dropped sharply as revenue in most categories continued to decline, but earnings topped analyst expectations.
Revenue fell 12 percent, missing expectations, and shares slipped 2 percent in aftermarket trading. The technology and consulting company has struggled with declining revenue over the last three years, as business customers have moved away from buying big mainframe computers and traditional software that’s installed on their own systems.
IBM has been spending heavily to develop new products, such as data analytics and artificial intelligence programs and “cloud” software that IBM delivers to customers over the Internet. But those new businesses have not grown as fast as the company hoped, while revenue has continued to fall in IBM’s traditional software, hardware and technology services businesses.
“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,” said CEO Virginia Rometty in a statement.
The Armonk, New York-based company said it had profit of $5.51 per share. Earnings, adjusted for costs related to mergers and acquisitions and non-recurring costs, were $5.81 per share. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of $5.41 per share.