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July 19, 2016

Q2 earnings round-up: IBM sales shrink again despite cloud growth, Yahoo revenue drops 20% & EMC reports flat sales

News: Three tech majors report Q2 earnings.

By CBR Staff Writer

Technology giant IBM has posted a decline in its revenue for the seventeenth consecutive quarter, despite experiencing growth in cloud computing and data analytics.

Revenue fell 2.8% to $20.24bn in the April to June quarter, even though cloud services posted a 30% increase in revenue which accounted for 17% of overall revenue.

IBM chairman, president and chief executive officer Ginni Rometty said: “IBM continues to establish itself as the leading cognitive solutions and cloud platform company.  In doing so, IBM is pioneering new business opportunities beyond the traditional IT marketplace.”

Revenues from Watson and analytics, security, and social and mobile technologies increased by 12% in the June quarter year-over-year. The segment generated $8.3bn in sales in the quarter.

Rometty said: "In the second quarter we delivered double-digit revenue growth in our strategic imperatives, driven by innovations in areas such as analytics, security, cloud video services and Watson Health, all powered by the IBM Cloud and differentiated by industry.  And we continue to invest for growth with recent breakthroughs in quantum computing, Internet of Things and Blockchain solutions for the IBM Cloud."

While its revenues from cognitive solutions were up 3.5% to $4.7bn, global business services division posted revenues of $4.3bn, down 2%. The systems division, which includes systems hardware and operating systems software, saw a 23.2% decline in revenue.

Also announcing finanical results was Yahoo, posting a sharp increase in its losses for the second quarter, led by a $482m write-down on the value of Tumblr. Net revenues dropped by 20% from last year, with net losses increasing to $439.9m in the June quarter compared to $21.6m in the corresponding quarter of 2015.

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While its revenue from emerging businesses – mobile, video, native and social advertising – increased by 25.7 % to $504m, its search revenue fell 17% to $765m.

Yahoo CEO Marissa Mayer said: "With the lowest cost structure and headcount in a decade, we continue to make solid progress against our 2016 plan. 

“Through disciplined expense management and focused execution, we delivered Q2 results that met guidance across the board and in some areas exceeded it.”

EMC, meanwhile, reported flat growth in its revenue at $6bn for the second quarter, ahead of shareholder vote on its merger with Dell.

It generated over $2bn in revenues from information infrastructure business, while the demand for its converged infrastructure portfolio grew 40% in the quarter year over year.

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