IBM shares slump after another sales stumble

Source: Provided by Moneyweb

Tech giant IBM has suffered a setback. What type of setback is this and what is the cause?

Shares of IBM tumbled 10 percent on Friday following disappointing results. This was after the tech company posted its fourth straight quarterly sales drop, which was worse than expected.

The disappointing results cast doubts on the company’s turnaround strategy.

The company was hurt by a sales decline in its software unit, as clients shied away from longer-term deals due to economic uncertainties brought on by the health crisis.

IBM is preparing to split into two public companies with the unit housing the so-called hybrid cloud, where companies use a combination of their own datacenters and leased resources to manage and process data, to retain the legacy name.

Cloud computing side of the business performed well in the last quarter of the year but that wasn’t enough to offset the weakness in other units of the business.