IBM Earnings Flatline for Eight Straight Quarters

Pressure mounts on CEO Virginia Rometty.
4:38 | 04/18/14

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Transcript for IBM Earnings Flatline for Eight Straight Quarters
-- It is Friday April 18 at today's big number is eight. Well and may not seem very big but if -- IBM in fact he is a big numbers. Now on eight straight quarters without an increase in revenue. Well when I'm -- Cutler in New York this Friday mornings for more on what it means for IBM in the future and the pressure possibly being felt by the company's yeah Virginia Romany. -- -- bring Jeff -- finance mr. -- happy Friday morning to you. If you as well my -- for those that are observing happy Good Friday those that are not happy great -- for everyone else. So what's going on it. -- be down. Not a lot they've got shrinking business this kind of across the board their strategy seems to be. To buy back a bunch of their own stock to make their earnings per share look good. And use the word cloud quite -- -- as and works spending McCloud and we see your future in the cloud meanwhile hardware software services. They're all declining which gives us that big number eight. A failure to grow revenues for two straight years a -- regret. Yet what you -- -- look at the hard numbers are the first quarter revenue shrank 4% 22 and a half billion dollars. As you point out they're obviously the traditional hardware -- businesses. Not doing very well but the fact the matter is though that company has been really steering -- -- away from those things from from those areas for awhile though haven't thing. What yeah this is we didn't just see this coming -- -- -- wake up yesterday and say oh my gosh people are ordering fewer PCs. We've known this was a problem for quite awhile and that's what makes it a little discouraging for folks who -- to be shareholders by -- Again the company is is they've been trying to trans border -- they've been trying date to show slowly shift into different lines of businesses. It doesn't seem to be taken hold and this is kind of really -- A good example of what's happening in corporate America in terms of our inability to grow earnings for IBM seemed kind of OK but it's largely just chicanery on the balance -- The company isn't finding organic ways to really grow that business. As a result you wind up with rather flat at best stock price while the rest of the world party's long. Yeah well case and always so talk another big number obviously being a is that the kind of number that has board members possibly looking for -- new CEO. It should. And I'd sure with the makeup is. Of the idea -- -- -- board. But you know it it's these kind of revenue growth things it's akin to -- a shower for one day and I can get away -- -- -- no revenue growth for maybe a quarter maybe two quarters. But after eight days of not growing revenues or taking a shower people are going to start to notice that maybe you're not doing quite as well as others would hope. There's going to be pressure exerted their particularly if the share price doesn't climb. Again they've been buying back a lot of their own stock in fact their borrowing money to buy back stock which is a curious idea in and of itself. But shareholders are revolting and that's a real problem it's going to be about that share price rather than revenue that puts a fire under -- CEO chair there IBM. Well and this is the response from the CEO issuing this statement -- as a bit of -- a message of assurance to the investors out there in the first quarter we continued to take actions to transform parts of the business. And a shift aggressively to our strategic growth areas including cloud big data analytics social mobile -- security. As we move through 2014 we will begin to see the benefits from these actions. You know the fact the matter is is that IBM is a legacy company it has been around for a long period of time. But how long are investors going to be elicit by and wait and say okay eventually the fruits of those labors. Are gonna start showing -- -- shoots essentially. Well I guess -- -- and I don't want to die on -- -- for Friday and I apologize for this but if you read that statement again you'll notice the only numbers our first is in first quarter. And 2014. As and that's what year it is everything else is -- lot of -- -- more sure about hope and aggressive and shift them like I said for cloud. Cloud social we have -- -- these are just buzz phrases you use for lack of anything better to say. When they start attaching numbers actually how big their -- businesses and it's driving revenues in a meaningful way. -- impressed but -- then these are just platitudes you can only -- -- -- for something quarters as well. Well sometimes you can put your dream and a cloud as well right I mean -- make it's that kind of paradigm. Hey why not -- -- that suits them back -- that. That coming year out of the first quarter spring this bringing in the air. Sunday will be a great big growing company again it's just not going to be this day are right now from a -- and trade -- Maggie -- finest mister MacKey -- -- their future my -- of course you can keep -- latest headlines right here dot com even watching the big number. And -- that's -- New York.

This transcript has been automatically generated and may not be 100% accurate.

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