India sole emerging market bright-spot in IBM Q2 results

MUMBAI: India was the sole emerging market bright-spot in IBM's second-quarter earnings, as the other BRIC countries weighed down the technology giant's results.

The company, which reported results on Monday after the US market closed, reported that its revenue fell for the 13th straight quarter, as it realigns its business to focus on new technologies such as the cloud, analytics and customer engagement.

The BRIC countries--- the acronym for Brazil, Russia, India, and China – impacted IBM's revenue growth rate by 2 per cent, the company's chief financial officer, Martin Schroeter, said on a post-earnings conference call with analysts. He added that excluding the BRICS, IBM's revenue would have been up 1 per cent.

“Within the BRICs only India had modest growth building on improved operational performance and services. The other three countries were down at a double-digit rate,” Schroeter said.

IBM said revenue in Brazil fell 16 per cent, and revenue in China was down 25 per cent.

For the second quarter, the company's total revenue fell to $20.81 billion, from $24.05 billion a year ago.

However, revenue from 'strategic imperatives' which is how company describes its focus on the new technologies rose 20 per cent. The company also took a $200 million charge related to 'workforce rebalancing' in the quarter.

In the post-earnings calls, IBM also said it had signed 22 deals worth more than $100 million between renewals and new clients.

Revenue from Global Business Services fell 3 per cent to $4.3 billion. IBM said it had much more to do to improve results, as clients move away from large ERP projects to smaller initiatives around cloud, mobility and analytics.

“We’ve been shifting skills and work from these declining practices to the new opportunity areas, we've had strong growth rates in our strategic imperatives, but we need to shift more aggressively to improve our overall GBS business results,” Schroeter said.

He added that the company had hired over 2,000 incremental resources into its mobility practices and shifted almost 1,000 to analytics projects.