IBM's quarterly profit plummeted more than 99 percent. Its CEO said IBM was ''disappointed in our performance.'' Fred Katayama reports.
A black eye for Big Blue. IBM just can't stop revenue from shrinking. And it barely finished in the black. Quarterly profit, which widely missed analysts estimates, fell more than 99 percent. IBM CEO Ginni Rometty fessed up, saying, "We are disappointed in our performance." Revenue slid across the board .. from hardware, which it's trying to shrink, to software and services, which it's trying to grow. And software is slowing. Earlier this year, IBM lost its second place spot in software revenue to another ailing company, Oracle, according to tech research firm Gartner. IBM's revenue fell in every geographic region. UBS analyst Steven Milunovich said, "Our problem is that two-thirds of revenue is legacy and that IBM's hope of keeping revenue and margins flat is a stretch given technology disruption." The bad numbers masked an earlier announcement investors had initially applauded. IBM is hiving off its money-losing chip business to contract chip maker Globalfoundries. But it's paying Globalfoundries to do so, some $1.5 billion, and writing off $4.7 billion. IBM shares, down nearly 3 percent this year, tumbled at the open, dragging down the Dow.