IBM CDR CAD Hedged (NEO:IBM)
Historical Stock Chart

From Jun 2019 to Jun 2024

The economic environment has "stabilized", the Chief Financial Officer of International Business Machines Corp. (IBM), Mark Loughridge, said Thursday, but its giant services business remains sluggish.

Despite pockets of improving sentiment, most notably in North America, IBM's new business signings for the services business fell 7% to $11.8 billion in the third quarter.

Loughridge said that while demand in areas like outsourcing, in which companies pay IBM to handle their core technology functions, was strong, the short-term consulting and systems integration business was still challenged.

This reflects a continuation of a trend IBM has seen over several quarters, whereby customers are buying only the technology services they need to keep businesses running, or which allow them to reduce costs, but foregoing more discretionary business transformation projects.

Revenues at IBM's Global Business Services unit, which includes consulting and systems integration, fell 11% compared with last year.

IBM noted, however, that there are considerable regional variations within this overall figure. In North America, signings within consulting and systems integration grew 20%, suggesting the total number is being brought down by weaker performance in other areas.

Loughridge also noted that IBM signed three large services deals in the first two days of October - falling outside the third quarter - with a total value of nearly $1 billion.

-By Jessica Hodgson, Dow Jones Newswires; 415-439-6455; jessica.hodgson@dowjones.com