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IBM sales and profits down, but future focus areas see growth

IBM experiences another fall in sales, but it continues to sell more in areas that will make up its future business

IBM’s overall sales and profits were down in the first quarter of 2017, reflecting a decline in traditional business, but sales of the technologies of its future grew.

Sales in the first three months of the year were worth $18.2bn, which was a 3% decline compared with the same period in 2016. Meanwhile, profits were down 13% to $1.8bn.

IBM’s technology services and cloud platforms business, which includes infrastructure services, technical support and integration software, saw a 2.5% drop in sales, at $8.2bn, in the quarter.

The biggest faller was the systems division, which includes systems hardware and operating systems software, where sales dropped by 16.8% to $1.4bn.

Sales in the global business services unit fell 3% to $4bn compared with last year.

There was better news in IBM’s cognitive technology business, with sales up 2.1% to $4.1bn compared with the first quarter of 2016. Sales of analytics and security, which include Watson-related offerings, contributed to this growth.

IBM said its strategic imperatives business lines, including security, cloud, analytics and mobile, recorded sales of $7.8bn in the quarter, an increase of 12%. This focus area accounted for 42% of total IBM sales over the past 12 months, worth $33.6bn.

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“In the first quarter, the IBM Cloud and our cognitive solutions both grew strongly once again, which fuelled robust performance in our strategic imperatives,” said IBM CEO Ginni Rometty.

“In addition, we are developing and bringing to market emerging technologies such as blockchain and quantum, revolutionising how enterprises tackle complex business problems in the years ahead.”

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