IBM Q4 Profit Down - Update

(RTTNews) - International Business Machines Corp. (IBM) Tuesday reported a drop in profit for the fourth quarter, as revenues continued to decline, hurt largely by sharp drop in hardware sales and strong US dollar. The company's quarterly earnings came in above analysts' expectations.

Armonk, New York-based IBM's fourth-quarter profit dropped to $4.46 billion or $4.59 per share from $5.48 billion or $5.51 per share last year.

Excluding one-time items, earnings from continuing operations fell to $4.84 per share from $5.81 per share last year. Analysts had a consensus earnings estimate of $4.81 per share for the quarter.

IBM's fourth-quarter revenues declined 8.5 percent to $22.06 billion from $24.11 billion last year. This marks the 15th straight quarter the company has reported lower revenues. Analysts polled by Thomson Reuters expected revenues of $22.04 billion for the quarter.

Strong U.S. dollar also negatively impacted IBM's revenues as the company generates majority of its revenues from outside the country. Excluding currency fluctuations, revenue fell 2 percent.

IBM is divesting off its low-margin and unprofitable hardware businesses to improve profitability. The company is now striving hard to make IBM a company that provides cloud computing and data analytics.

Global technology unit's revenues declined 7.1 percent to $8.13 billion, while software segment revenue dropped 10.7 percent to $6.77 billion. Global business service revenues declined 9.9 percent to 4.30 billion.

IBM closed Tuesday's trading at $128.11, down $1.92 or 1.48%, on the NYSE. The stock further dropped $1.11 or 0.87% in the after-hours trading.