The advancing aim of $40 billion (S$54 billion) in annual revenue from the cloud, big data, security and other growth areas by 2018 is the latest step for the technology giant towards emerging, high-margin businesses, and away from its previous strongholds in hardware and servers.
IBM Chief Executive Virginia Rometty has said she was happy to jettison revenue from such unprofitable businesses, which she dubs “empty calories.”
IBM revenue has now fallen for the past 11 quarters, while earnings growth has been sporadic.
The company says its long-term plan is to hit “low single-digit” revenue growth and “high single-digit” growth in operating earnings per share. Last year IBM withdrew its long-term plan to hit $20 per share in operating earnings for 2015.
IBM stood by its January forecast of $15.75 to $16.50 in operating earnings per share for 2015. Analysts expect $16.02, on average, according to Thomson Reuters I/B/E/S.
But the company, which gets more than half its revenue from overseas, said the strong US dollar would crimp sales by more than 6 per cent this year. In January, it had expected a currency-exchange dent to revenue of 5 per cent to 6 per cent.
IBM shares were up 0.6 per cent at $163.80 on the New York Stock Exchange.