Despite a surge of bankruptcies and general economic dismay brought on by the coronavirus pandemic, many tech companies in the U.S. have been doing exceptionally well in terms of stock performance, market valuation and revenue. An outlier to this trend, however, shows how a century-old tech company is still finding growth and new sales difficult both before and during the pandemic.
IBM reported their second quarter earnings for 2020 on July 20, showing another quarter of declining revenue and sales. Despite the 5.4 percent fall in revenue from the previous year, earnings still beat analysts’ predictions of even steeper losses due to falling sales from COVID-19. Cloud-computing revenue was again one of the few bright spots for IBM, growing by 30 percent from the previous year to a revenue of $6.3 billion for the tech giant.
COVID-19 couldn’t have come at a worse time for IBM. Quarterly revenue has been falling for the past two years for the company, when a brief three quarters of growth offset another two years of losses dating back to 2016. IBM has been shifting their business to compete more with cloud computing giants like Amazon and Microsoft, sensing the huge profit potential in the cloud industry. Global IT services, however, are still the bulk of IBM’s business, where the company provides comprehensive infrastructure to public and private companies across the world.
Other top tech companies are gearing up for their second quarter earnings reports, with Intel reporting this week and Amazon, Apple, Alphabet and Facebook reporting next week.