IBM revenue falls more than expected, cuts profit forecast

International Business Machines Corp posted a bigger-than-expected drop in revenue and cut its full-year profit forecast, as a stronger US dollar accentuated weakness in demand from China and emerging markets.

It was the 14th quarter in a row that IBM has posted a reduction in revenue, as the world's largest technology services company gets rid of low-margin businesses, but has so far failed to make up the shortfall with newer initiatives in the more lucrative area of cloud computing.

Shares of IBM fell 4.8 per cent in after-hours trading to $141.95. "This is another example of the massive headwinds that large-cap traditional tech stalwarts are seeing in this ever-changing environment, as more customers move to the cloud," FBR Capital Markets analyst Daniel Ives said. China was particularly hard hit, with fewer big deals causing revenue from that country to fall 17 per cent, IBM's chief financial officer said on a conference call.

India shining

India is a bright spot for global technology major IBM, which reported on Tuesday its worst revenue growth in 13 years. The India business grew for the third consecutive quarter as local firms bought its software and hardware in anticipation of the economy to grow faster.

"China was down 17 percent, with fewer large transactions in the quarter and the bright spot again was India, which grew for the third consecutive quarter," Martin Schroeter, IBM's Senior Vice President and Chief Financial Officer said in a statement.