IBM Upside Appears Limited At Current Price

For the quarter, reported revenue declined 2.8% year over year to $20.2 billion (fell 2.6% in constant currency). The cognitive solutions segment was the strongest business segment, with analytics and security helping revenue increase 4% year over year to $4.7 billion. Global business services performed well in digital-related practices; however, the firm is seeing price and profit pressure in legacy service lines, and management also noted some execution issues connected to larger-than-expected investment needs for client projects. We will diligently monitor these unfavorable developments as the firm aims to retain its top-flight IT services position.

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