IBM revenue dips 2.6% though Cloud sale surges 19% to $6 bn

IBM said its total revenue fell 2.6 percent to $17.56 billion in the third quarter of fiscal 2020.
IBM did not reveal sales forecast for the current quarter.

The global technology services segment, IBM’s biggest unit that caters to world’s largest data centers, reported 4 percent drop in revenue to $6.5 billion.

Revenue from the cloud business rose 19 percent to $6 billion in the third quarter, offsetting weakness in much of its other businesses.

The boost from the cloud business underscores move of IBM to focus on high-margin open hybrid cloud and AI solutions, which together account for more than half of its recurring revenue, by spinning off its IT infrastructure services unit.

“Clients continue to balance short-term challenges and opportunities for transformation … More of my conversations with CEOs are around how they become digital businesses,” IBM CEO Arvind Krishna said on a post-earnings call.

“Clients’ near-term priorities continue to include operational stability, flexibility and cash preservation, which tends to favor operating expenses over capital expenses),” IBM chief financial officer James Kavanaugh said. “This is resulting in some project delays and purchase deferrals.”

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