Weighed Down by Declining Quarterly Revenue and Earnings, IBM Shares Tumble

Shares of International Business Machines Corp. (IBM Corp.) plunged sharply by more than 5 percent in after-hour U.S. trading on Tuesday after the company reported declines in revenue and earnings on a yearly basis.

The software company said in the first quarter of 2017, it earned a net income of $1.75 billion, or $1.85 a share, which was below a figure of $2 billion, or $2.09 a share, in the year-earlier period. Excluding one-time items, IBM said earnings came in at $2.38 a share, roughly above consensus estimate of $2.35.

Regarding the company’s revenue for the three-month period, data showed a decline to $18.16 billion from $18.7 billion last year regardless of a 60% improvement in its software-as-a-service business. The result missed a Wall Street’s estimate of $18.4 billion.

As for its fiscal 2017 outlook, IBM maintained its forecast for earnings of at least $13.80 a share. This was slightly above analysts’ expectations calling for full-year earnings of $13.77 a share.

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