IBM Chief Executive Officer Arvind Krishna has proved he is no more competent to turn around what was once America’s most prominent tech company than his disaster-prone predecessor Ginni Rometty, who went a long way toward wrecking it. The tailspin continues. Its place as an also-ran in the cloud computing and artificial intelligence sectors has been cemented.
International Business Machines Corp. (NYSE: IBM) announced a 6% plunge in revenue to $20.4 billion in the fourth quarter. That missed Wall Street expectations. Earnings dropped 66% to $1.41 per share. Krishna almost unbelievably commented, “We made progress in 2020 growing our hybrid cloud platform as the foundation for our clients’ digital transformations while dealing with the broader uncertainty of the macro environment.” Rivals, other than Apple, which include Google, Amazon and Microsoft, have had no such problems. IBM has floundered in an improving market. As proof of that, note that its Cloud & Cognitive Software unit posted a revenue dip of 4.5% to $6.8 billion.
After earnings were released, shares fell 7% to $122. In the past five years, IBM’s stock is up 7%. The Nasdaq has gained 195% in that time, and Microsoft’s shares have risen $330%.
MarketWatch commented, “IBM revenue has fallen year-over-year in all but four of the past 34 quarters.” Krishna pitched the fact that would change. “The actions we are taking to focus on hybrid cloud and AI will take hold, giving us confidence we can achieve revenue growth in 2021,” he said.
If IBM does not look outside the company to find a new chief executive, its board continues to be irresponsible. This is particularly true of Michael L. Eskew and Sidney Taurel, who have been on the board long enough to see the disaster unfold year after year.
IBM has fallen from a position that once made it the envy of the tech world, which was a very, very long time ago.