IBM CEO Says Company Didn't Meet Expectations In 2013

(RTTNews) - International Business Machines Corp.'s (IBM) chief executive officer Virginia Rometty said in a letter to employees that the company's performance in 2013 did not meet expectations. The firm should address those parts of the business that are holding it back, she added.

The company's operating pre-tax income was down 8 percent in 2013, and reported revenue fell 5 percent to $99.8 billion, while it slid 2 percent at constant currency.

''...we must acknowledge that while 2013 was an important year of transformation, our performance did not meet our expectations...So, while we continue to remix to higher value, we must also address those parts of our business that are holding us back,'' Rometty said.

Rometty noted that in order to meet growing demand for greater speed, and legal requirements for compliance and data residency, IBM is aggressively expanding its global cloud footprint.

It is estimated that by 2016, over one-fourth of the world's applications will be available in the cloud, and 85 percent of new software is now being built for cloud.

Rometty said IBM is accelerating the move of its Systems product portfolio, especially Power and Storage, to growth opportunities and to Linux, following the lead of its successful mainframe business.

While IBM's growth in Latin America and Middle East and Africa was strong, enterprise spending slowed in other key growth markets, she noted. ''We are intensifying focus on new growth opportunities. Overall, the opportunity in the world's growth markets remains attractive,'' Rometty added.

IBM closed unchanged with a positive bias on Friday at $187.68.