IBM revenue avoids weaknesses in the previous infrastructure segment

File photo: A man stands next to the IBM logo on February 25, 2019, at the Mobile World Congress in Barcelona, ​​Spain. REUTERS / Sergio Perez / File Photo

October 20 (Reuters) – IBM (IBM.N) missed its quarterly earnings market estimate on Wednesday as its infrastructure fell 4% due to a fall in orders next month.

The lower margin, Legacy Unit, provides technical support to IBM customers and has reduced the number of companies moving to the cloud in recent years, dragging on Big Blue’s revenue.

Chief Financial Officer James Kavangu said in an interview: “As we set a date for the launch of our managed infrastructure, our customers paused all new project activities by the end of September and this has affected us.”

By the end of September 30, Kyndryl’s business in the global technology services sector had dropped from 4.8% to $ 6.15 billion.

In addition, Kavanaug’s demand for IBM’s mainframe computing business has declined, with a 12% decline in revenue towards the end of the production cycle.

The slowdown in the old business has turned the 110-year-old IBM into a hybrid, a $ 1 trillion marketplace, to grow and compete better with Inc (AMZN.O) and Microsoft Corporation (MSFT.O).

Revenue from Cloud and Knowledge Software Unit increased by 2.5% to $ 5.69 billion, but analysts estimate that $ 5.77 billion was missing.

“The weakness in high-growth areas is more problematic than the lack of revenue,” said Moshe Katry, a Webbush analyst.

Gross revenue rose to at least $ 17.62 billion, missing $ 17.77 billion.

However, IBM’s revenue for Kyndryl Spinoff was adjusted by 2.5%, partly due to the need for consulting services from companies that have digitalized their operations during the CVD-19 epidemic.

IBM earned $ 2.52 per share, compared to an estimated $ 2.50.

Reporting by Chavi Mehta and Tiyashi Datta in Bengali; Correction by Aditya Soni

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