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| IBM pays $1.5 billion to dump chip division as third quarter earnings miss | IBM pays $1.5 billion to dump chip division as third quarter earnings miss |
| (about 1 hour later) | |
| IBM will pay $1.5 billion to get rid of its loss-making chip division as it shifts towards mobile, cloud computing and big data analytics. | IBM will pay $1.5 billion to get rid of its loss-making chip division as it shifts towards mobile, cloud computing and big data analytics. |
| The company will make payments to Globalfoundries, owned by the Abu Dhabi government's investment fund, over three years and take a $4.7 billion charge in connection with the deal. | |
| As part of the agreement, the contract-chipmaker will acquire IBM's global commercial semiconductor technology business, including intellectual property, and its commercial microelectronics business. | As part of the agreement, the contract-chipmaker will acquire IBM's global commercial semiconductor technology business, including intellectual property, and its commercial microelectronics business. |
| The announcement comes as IBM posted lower-than-expected third quarter earnings, which saw shares plunging 8 per cent in pre-market trade. | |
| IBM reported profits of $3.68 per share, excluding certain items, missing estimates of $4.31. Revenue also came in below estimates at $22.40 billion from $23.34 billion a year earlier. | IBM reported profits of $3.68 per share, excluding certain items, missing estimates of $4.31. Revenue also came in below estimates at $22.40 billion from $23.34 billion a year earlier. |
| The IT giant conceded it no longer expects to deliver earnings of at least $20 a share next year as promised by former chief executive Samuel Palmisano, who vowed to double earnings to at least $20 by 2015. | The IT giant conceded it no longer expects to deliver earnings of at least $20 a share next year as promised by former chief executive Samuel Palmisano, who vowed to double earnings to at least $20 by 2015. |
| "We are disappointed in our performance," chief executive Ginni Rometty said. "We saw a marked slowdown in September in client buying behavior, and our results also point to the unprecedented pace of change in our industry." | "We are disappointed in our performance," chief executive Ginni Rometty said. "We saw a marked slowdown in September in client buying behavior, and our results also point to the unprecedented pace of change in our industry." |