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IBM Shares Fall on Lowered 2015 Expectations

Big Blue will earn less this year than it previously expected.

Shares of computing and IT service giant IBM fell by as much as 4 percent as the company lowered its expected earnings for the year as its sales continued to slow down amid increased competition.

IBM slashed the range of its expected earnings for the 2015 fiscal year to between $14.75 and $15.75. Its prior range was $15.75 to $16.50. Analysts polled by Thomson Reuters had forecast 2015 earnings of $15.68.

For the third quarter, Big Blue beat analysts’ estimates, posting adjusted profit of $3.34 versus a consensus view of $3.30. Total revenue fell 14 percent to $19.3 billion, representing the 14th straight quarter of revenue declines.

Sales in the Global Technology services segment fell 10 percent versus the year-ago quarter to $7.9 billion. Sales of its Global Business Services unit fell 13 percent to $4.2 billion.

The company saw growth in its new business lines such as cloud computing. Revenue in that business rose 45 percent to $9.4 billion from the year-ago period. That included $4.5 billion it said encompassed computing delivered on an “as a service” basis.

The problem is those business aren’t yet mature enough to make a dent in the overall results. CEO Ginni Rometty calls them “strategic imperatives” and they include cloud computing, mobile software, analytics and security.

The news comes as Re/code reported today that IBM is in talks to acquire some of the digital assets of The Weather Channel.

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