Declining demand for computer equipment dented IBM’s (IBM) first-quarter revenue. Investors weren’t happy, sending IBM stock down almost 4% in Thursday morning trading.
IBM shares sank after the tech giant reported a Q1 net profit of $2.38 billion, down 21% from $3.03 billion in the prior-year period. Adjusted EPS came in at $2.54, matching Wall Street expectations, Reuters notes.
First-quarter revenue fell to $22.5 billion, down 4% year-over-year and hitting a five-year low. It also missed the $22.91 billion that analysts had forecast for the quarter. IBM revenue was pushed down by a 23% decline in the company’s hardware business. During a conference call discussing the results, IBM CFO Martin Schroeter warned that “overall revenue growth will be impacted by the challenges in our hardware business” in 2014.
IBM has seen revenue fall for eight consecutive quarters.
Though once a leader in computer technology, IBM has been moving away from equipment manufacturing in favor of software and cloud services. Earlier this year, IBM sold its low-end service unit to Lenovo Group (LNVGY) in a deal valued at $2.3 billion.
In February, rumors circulated that IBM is also considering the sale of its semiconductor business.
IBM stock closed at $196.40 per share on Wednesday.
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