Tags: IBM | CEO | Margins | Sales

IBM CEO: Boosting Margins More Crucial Than Sales Growth

Wednesday, 22 Oct 2014 06:03 PM

IBM sees boosting profit margins as more important than sales growth, Chief Executive Officer Ginni Rometty said Wednesday, holding firm to her strategy after a disappointing quarter sent shares tumbling.

Investors aren’t getting much expansion on either front. Earlier this week, Rometty’s technology company reported a 10th consecutive quarter of sales declines, and its operating gross profit margin dropped 0.9 percentage point from a year earlier to 49.2 percent. Operating earnings per share will slide 2 percent to 4 percent this year, the Armonk, New York-based company said.

“It’s a dangerous thing to talk about your target being just a size without the relevance of what you do,” Rometty said in remarks at the Boston College Chief Executives’ Club of Boston. “What’s most on my mind is that I keep remixing in high growth.”

The pressure is mounting for Rometty to speed up International Business Machines Corp.’s transition to cloud computing, where customers access software and data remotely rather than on site. The challenge is to move into that growing business quickly enough to make up for the decline in demand for older hardware and technology consulting services.

IBM shares have dropped 11 percent since the earnings report to $161.79 at Wednesday’s close in New York. That’s the biggest three-day decline since 2008.

Rometty said Wednesday she hadn’t expected it to be “such a busy week.” She accepted questions only from club members at the Boston College event.

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IBM sees boosting profit margins as more important than sales growth, Chief Executive Officer Ginni Rometty said Wednesday, holding firm to her strategy after a disappointing quarter sent shares tumbling.
IBM, CEO, Margins, Sales
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2014-03-22
Wednesday, 22 Oct 2014 06:03 PM
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