On Wednesday, IBM Corp (IBM.N) missed Wall Street’s first-quarter revenue projections due to falling corporate IT spending and a strong currency.
After a post-pandemic boom in demand for consulting services, high inflation, and interest rates have slowed customer spending, slowing the IT business.
IBM lowered its full-year consulting revenue projection to 6%-8% from high single-digit growth.
“We are seeing softness in certain components of our discretionary based offerings in consulting,” CFO James Kavanaugh told Reuters regarding the U.S. market.
IBM’s consulting revenue climbed 8.2% at constant currency to $4.96 billion in the quarter that ended March 31. Software sales grew by 6%. Both segments grew to mid-to-high teens last year.
In January, Big Blue predicted revenue growth between 3% and 5% at constant currency. However, Refinitiv data shows analysts estimate 3.6% growth.