IBM: Fiscal 1Q19 Financial Results

IBM Corp. reports 1Q19 financial results ended March 31, 2019.

IBM’s global revenue was $18.2 billion during the quarter, down 4.7% Y/Y.

It’s worst for storage hardware down yearly as much as 11%.

This percentage corresponds to quarterly sales of around $366 million according to our calculation, representing a mere 2% of global sales.

It’s the third consecutive quarter of decreasing revenue in this sector after -6% in 3Q18 and -7% in 4Q18.

For all Big Blue’s Systems (including systems hardware and OS software), sales were $1.3 billion in 1Q19, down 11%), with growth in Power systems, offset by the impact of the IBM Z product cycle dynamics and weakness in storage.

Storage hardware declined in both the high-end and mid-range, offset by continued growth in AFAs, enable to compensate the declining hybrid and all-HDD arrays business. Performance reflects declines in high-end, which is tied to mainframe cycle, and the ongoing competitive dynamics and pricing pressures. The company said it’s “continuing to introduce new innovations and functionality to differentiate in this environment as we look to manage the portfolio for the market shift to flash.”

Storage was a weak performance in the more recent quarter. It was entirely driven again by the high-end DS8000, – recently refreshed -, attached to mainframe.

Will IBM continue to keep its storage business after such catastrophic results since more than 7 years (see below)? Eventual buyer could be Lenovo, partner since several years, to complement its storage portfolio with higher end systems.

Revenue Growth of IBM Storage Products

To read the earnings call transcript