While other tech companies such as Amazon and Twitter saw a spike in profit in the third quarter of 2020, American multinational technology company IBM has a different scenario as it is hit by rare sales decline in software units, posts disappointing quarterly revenue.
Although the tech giant may have seen a slight growth in revenue, it was not enough to convince investors as the company's shares dropped 6.7 percent to $122.98 in extended trading after IBM's fourth consecutive quarter of sales decline, while sales from cloud and cognitive, which houses IBM's software offerings and its biggest unit, declined 4.5 percent to $6.8 billion after two years of growth, this is according to Gadgets 360.
The company’s revenue from its cloud-computing business rose 10 percent to a record $7.5 billion in the fourth quarter, with IBM saying it is confident of returning to sales growth in 2021 and expected revenue to grow in mid-single digits after the separation.
"Our performance reflects the fact that our clients continue to deal with the effects of the pandemic and broader uncertainty of the macro environment," said Chief Executive Officer Arvind Krishna.
"This puts additional pressure on larger software transactions this quarter and project delays in some services engagements."
In October last year, IOL reported that the company’s new unit, which is part of its global technology services division, serves 4,600 clients and has an order backlog of $60 billion (R995.01 billion).
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