The net profit of International Business Machines Corp. (NYSE: IBM), the world's largest provider of computer services, decreased in the second quarter of 2015 by 17%, to $ 3.4 billion, or $ 3.5 per share, compared with $ 4.1 billion, or $ 4.12 per share, for the same period last year, according to a press release.
At the same time the company's adjusted earnings per share exceeded market expectations due to strong cost reduction in the core business and revenue decline, which has continued for 13 consecutive quarters, didn’t reach the consensus. IBM shares fell further after the closure of the main trading session on Monday by 5.3%.
IBM profit, excluding one-time factors, was $ 3.8 billion, or $ 3.84 per share.
The company's revenue fell more than 13%, from $ 24 billion to $ 20.81 billion.
Analysts polled by Thomson Reuters, on average, had forecast adjusted earnings of $ 3.78 per share on revenue of $ 20.95 billion.
In the second quarter, IBM's revenue in North America fell 8% in annual terms – to $ 9.8 billion, in Asia-Pacific region with 19% - to $ 4.3 billion, in Europe, Africa and the Middle East with 17%, which is $ 6.6 billion.
Sales in the BRIC countries (Brazil, Russia, India and China) have collapsed by 35%.
IBM has reduced the revenue from the sales of computer equipment by 32% - to $ 2.1 billion. However, sales of System z servers brought on 9% more than last year.
Revenue of Systems and Technology division decreased by 10.5% - to $ 8.1 billion; revenues from sales of software decreased by 10% - to $ 5.8 billion; business services fell 12%, to $ 4.3 billion. In cloud technology field, IBM has increased its revenues by 50% compared to the second quarter of 2014, or 70% adjusted for exchange rate fluctuations and other factors.
IBM expects to improve business performance in the field of computer equipment in this year and a slight increase in free cash flow, whereas previously it was assumed zero change.
The company confirmed its profit forecast, excluding one-off factors, for this year at $ 15.75-16.5 per share. The consensus forecast of analysts on full-year profit is $ 15.88 per share.