As collapse of IBM continues, CEO under
As International Business Machines Corp.’s (NYSE: IBM) financial results continue a remarkable collapse, its CEO, Ginni Rometty, becomes ever more optimistic in her view of the company’s future. Rometty’s public comments are either a sign of self-delusion or a means to keep a job on which her grip weakens by the quarter.
Consider that IBM posted a 13.5% drop in revenue to $20.8 bln in the second quarter and that net income fell 16.6% to $3.6 bln.
Measure that against her reaction: “Our results for the first half of 2015 demonstrate that we continue to transform our business to higher value and return value to shareholders. We expanded margins, continued to innovate across our portfolio and delivered strong growth in our strategic imperatives of cloud, analytics and engagement, which are becoming a significant part of our business.”
The marks of the transformation are that sales across every major IBM division fell last quarter.
Rometty’s excuse for results is that the company has entered new businesses that show promise: “Revenues from the company’s strategic imperatives — cloud, analytics, and engagement — increased more than 20% year-todate (more than 30% adjusting for currency and the divested System x business). Total cloud revenues increased more than 50% (more than 70% adjusting for currency and the divested System x business) yearto-date, and is $8.7 bln over the last 12 months, adjusted for the divested System x business. The annual run rate for cloud delivered as a service — a subset of the total cloud revenue — increased to $4.5 bln from $2.8 bln in the second quarter of 2014. Revenues from business analytics increased more than 10% (more than 20% adjusting for