The recovery in business spending looks to be having a negative impact on IBM’s business sales. IBM denied that the figures pointed to any downturn in the economy.
There was “certainly not a pull-back in [corporate] spending” during the quarter, said Mark Loughridge, chief financial officer. Growth rates across the company’s businesses, and in all parts of the world, had picked up from the first quarter of the year and showed signs of continuing to improve this quarter as well, he added.
The uncertainty came from a 12 per cent decline in the value of new contract signings in IBM’s services division, which accounts for nearly 60 per cent of its revenues. However, IBM executives said they believed that the steady recovery was likely to pick up steam in the second half of this year, helped partly by new product cycles in the hardware division.
New mainframe computers and high-end servers due to go on sale in the coming months should lead to accelerating growth in hardware sales, which had been held to only 3 per cent in the latest quarter as customers waited for the new products, said Mr Loughridge, according to the Financial Times. |