IBM: Fiscal 1Q18 Financial Results

IBM Corp. announced 1FQ18 earnings results for the period ended March 31, 2018.

Even if IBM quarterly earnings report tops consensus estimates with total revenue growing 5% at $19 billion for the global company, it’s another story for storage.

As usual Big Blue revealed a minimum of information on storage with only one figure and nothing else: -15% Y/Y for hardware revenue, much below expectations, and meaning back to decreasing.

Nothing was published on storage software probably in better situation.

This important decrease follow four consecutive quarters of growth between 4% and 8%, preceded by more than 14 quarters with negative percentages. (see table below)

Last year we estimate IBM storage revenue at $478 million in 1Q17. So revenue for the most recent quarter is only around $406 million.

An IBM’s executive commented: “We were disappointed in our storage performance and it contributed to a modest shortfall to our own expectations of IBM’s revenue growth in the quarter. Storage hardware was down after four consecutive quarters of growth, driven by an increasingly competitive environment and continued pricing pressures, though we expanded margins. We also had some sales execution challenges which impacted performance. Remember what we are talking about here is just the hardware element of storage. Clearly, we’ve seen some of the value shift to software and this quarter we had strong growth in software-defined storage and cloud object storage, which are reported in transaction processing software.”

Growth is a mere 1% Y/Y for this later segment.

Revenue Growth of IBM Storage Products

To read the earnings call transcript