April 21, 2005
IBM Stock Falls 7% On Q1 Earnings Report
Outsourcing giant, IBM, saw its stock fall 7 percent on a 1st quarter revenue report that failed to meet expectations. The company responded by underscoring its efforts to de-emphasize hardware in favor of "value-added services." IBM has long been a major player in information services outsourcing, and this most recent dissapointment by the company signals that this area will become increasingly important in the future. On a wider scale, this move indicates the confidence IBM executives have in the future of outsourcing growth and profitability. Line 56.com reports:
IBM Global Services' revenue grew 6 percent, and analyst Lance Travis of AMR Research pointed out shining areas within services in a note: "...their transformational outsourcing service revenue grew by 40%... bookings for the Engineering and Technology Services (its outsourced product engineering service) were up more than 90%, reflecting the trend for businesses to outsource more core product developing in order to accelerate new product delivery."
Read More: IBM Stumbles
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