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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 |
| (35 minutes later) | |
| Shares in IBM plunged in New York trading after the company badly missed third-quarter estimates and confirmed it would take a $4.7 billion charge to get rid of its loss-making chip division. | Shares in IBM plunged in New York trading after the company badly missed third-quarter estimates and confirmed it would take a $4.7 billion charge to get rid of its loss-making chip division. |
| The company will make payments to Globalfoundries, owned by the Abu Dhabi government's investment fund, over three years as it ditches its costly chip division to focus on 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 as it ditches its costly chip division to focus on mobile, cloud computing and big data analytics. |
| The announcement comes as IBM posted lower-than-expected third quarter earnings, which saw shares plunging 7 per cent in pre-market trade in what chief executive Ginni Rometty described as a "disappointing" quarter. | |
| 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. |
| "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," Rometty added. | "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," Rometty added. |
| 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 by 2015. |