IBM falls to five-year low as profit forecast misses estimates

New York

IBM fell to the lowest price in more than five years on Wednesday after its 2016 profit forecast fell short, underscoring the company's struggle to offset a persistent decline in its traditional hardware, software and technology services business.

IBM tumbled 4.9 per cent to US$121.86 at the close in New York, the lowest price since July 2010. It was the biggest drag on the Dow Jones Industrial Average, which fell 1.6 per cent on Wednesday.

International Business Machines Corp is in the midst of a multiyear transition that has weighed on the stock. CEO Ginni Rometty is working to drive growth by focusing on newer operations, including cloud computing and data analytics, trying to counter investor concerns about revenue by emphasising that the new businesses are higher in value and more profitable. While sales of the new services, bundled together under the heading "strategic imperatives", increased 16 per cent to US$28.9 billion in 2015, the company forecast …