After the close of trading on Tuesday, April 18th, International Business Machines Corp (IBM) reported first quarter 2017 revenue of $18.2 billion, a decline of 3% from last year's $18.6 billion. Additionally, the company's net income fell to $1.750 billion from $2.014 billion. On a non-GAAP​ basis, the company reported income from continuing operations of $2.255 billion, down slightly y/y from $2.270 billion in the first quarter of 2016. Finally, the company reported non-GAAP diluted EPS of $2.38, up from last year's $2.35. The number of shares outstanding, assuming dilution, fell to 947.8 million from 964.4 million in the first quarter of 2016.

Analyst had been looking for IBM to report revenue of $18.37 billion and non-GAAP EPS of $2.35. Meanwhile, EBITDA came in at $3.265 billion, compared to estimates of $3.642 billion, according to YCharts. Shares of IBM fell nearly 5 percent after hours yesterday and have not recovered at all on Wednesday. The chart below of IBM and its trailing twelve months (TTM) of revenue sums things up the best.

IBM Chart

IBM data by YCharts

IBM's revenue has been falling and falling for years now; this was the 20th straight quarter of sequential revenue declines. There is no way to sugar coat it any longer: the promised IBM turnaround story is not happening and investors are running out of patience.

Look at the PEG ratios and sales estimates, both of which analysts expect to decline through 2018. Considering IBM has racked yet another quarter of missed revenue estimates, they may need to fall further. You can even argue shares of IBM are overvalued: given today's losses, the market would agree with that premise.

Here is the biggest problem for IBM: its fastest-growing segment is cloud computing, with revenue of $3.5 billion and growth of 33%, but it only made up 19.2 percent of total revenue in the first quarter. Moreover, the cloud is a highly competitive business, with multiple large players in the field. How many years will it take for cloud computing to grow to a point where it has a material impact on IBM's bottom line and drive growth? When does the cloud business become commoditized? How many more companies need to enter the market before the pricing pressure really hurts IBM? Does IBM have a unique competitive advantage in cloud? If they don't, Big Blue needs to come up with a Plan B. Look at what Amazon is doing in retail and every other market segment it touches. We know AMZN is not afraid to take a loss to capture market share.

Investors are patient with turnaround stories only for so long. Ask yourself, is IBM a turnaround story or just another story?

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