It’s been a few years since IBM (NYSE: IBM) started talking about its turnaround strategy. The disappointing results of the recently released third quarter do not please investors. The market loses patience and the stock has seen the biggest decline in the last four years, falling to the level of early 2016.

Financial Stats Of IBM

Revenues for the quarter decreased 2.1% year-over-year to $ 18.8 billion, exceeding Street’s estimate of $ 19.1 billion. Adjusted earnings of $ 3.42, however, were better than expected by the market of $ 3.40.

By segment, Cognitive Solutions revenue, which includes software solutions and transaction processing software, decreased 6% to $ 4.15 billion. Global business services revenues increased 1% to $ 4.13 billion, while technology services and cloud computing platforms declined 2% to $ 8.29 billion. Systems revenues increased 1% to $ 1.74 billion and Global Financing revenues decreased 9% to $ 388 million.

Among the key indicators, Cloud revenues rose 10% to $ 4.5 billion, well below the 20% recorded a quarter ago. Global revenue generated by strategic imperatives improved by 13% over the last 12 months to $ 39.5 billion, compared with the 15% growth recorded last quarter. For the quarter, IBM revealed that signatures fell by 21% to $ 8 billion, and the backlog of Services, fell 3% to $ 113 billion.

IBM’s Watson Woes

The market is clearly concerned about IBM’s ability to implement key technology trends. Cognitive Solutions, which includes Watson, was one of the weakest segments of the company during the quarter. IBM attributed the decline in this segment at the close of the largest transactions and to the “secular changes” in the collaboration software, commerce and talent management markets.

According to a survey by Morgan Stanley, those who want to evaluate the artificial intelligence tools of their company increased by 45%, against 35% a year ago. But this growth does not go in favor of IBM. The report found that businesses were more likely to use Amazon (NASDAQ: AMZN) as the preferred supplier over IBM. Amazon’s machine learning service through AWS saw interest increase 24% a year ago, from 24% to 27%, while IBM’s preference went from 33% to 24%.

Results of the survey aside, IBM Watson is not gaining ground even in industries and applications where it has already been deployed. For example, the Watson-on-Oncology service, which IBM says will revolutionize the diagnosis and treatment of cancer, is not progressing as fast as expected. The reports reveal that most of IBM’s partners have blocked or curtailed these projects because they do not see Watson having a positive impact on cancer treatment. Some doctors also added that despite the free access to the service, they did not feel comfortable with Watson, mainly because of a lack of confidence.

What’s with IBM

But IBM believes that it addresses these concerns through new offers. For example, in commerce, he has integrated artificial intelligence into offerings such as customer experience analysis and introduced Notes Domino Version 10, designed for mobile devices and supporting JavaScript and Node.js.

IBM recently launched Sugar.IQ, an application developed with Medtronic (NYSE: MDT). The app harnesses data and applies intelligence to Medtronic’s blood glucose meters. Within the analytics platform, he continued to invest in data and AI improvements. He announced bias detection services and introduced new Watson services on the IBM Cloud Private platform.

In the emerging field of the blockchain, the IBM Food Trust Food Security Network has become operational. The service uses blockchain technology to create visibility and accountability in the food supply chain. It connects producers, processors, distributors, and retailers through authorized, permanent and shared registration of food system data.

It has reached an agreement with Maersk to launch TradeLens, which will apply blockchain technologies to address inefficiencies in the global supply chain. It already has more than 50 participants in the ecosystem and now has more than 75 active blockchain networks.

Its stock is trading at 52-week low levels of $133.42 with a market capitalization of $122 billion. It touched a 52-week high of $171.13 in January this year.
Caption

IBM recently launched Sugar.IQ, an application developed with Medtronic (NYSE: MDT). The app harnesses data and applies intelligence to Medtronic’s blood glucose meters. Within the analytics platform, he continued to invest in data and AI improvements. He announced bias detection services and introduced new Watson services on the IBM Cloud Private platform.

In the emerging field of the blockchain, the IBM Food Trust Food Security Network has become operational. The service uses blockchain technology to create visibility and accountability in the food supply chain. It connects producers, processors, distributors, and retailers through authorized, permanent and shared registration of food system data.

It has reached an agreement with Maersk to launch TradeLens, which will apply blockchain technologies to address inefficiencies in the global supply chain. It already has more than 50 participants in the ecosystem and now has more than 75 active blockchain networks.

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