It has only been a few days since Warren Buffett admitted buying nearly four per cent of Tesco was a "huge mistake", but now another one of the legendary investor's big gambles is looking shaky. IBM said sales fell four per cent to $22.4bn (£13.9bn) in the three months to the end of September - its ninth consecutive quarter of declines.
Shares in the company fell 7.5 per cent in pre-market trading on the figures, which showed net income slid to just $18m, compared with $4bn in the same period last year. The company also ditched its five-year profit target of $20 a share by 2015.
That target was one of the primary factors which attracted Buffett to spend $10.7bn on a 5.5 per cent stake in the business. He is famously reluctant to invest in the technology industry, saying he doesn't "understand" it, but broke with tradition in 2011, saying "I don't know of any large company that really has been as specific on what they intend to do and how they intend to do it as IBM". Since then, Buffett's investor, Berkshire Hathaway, has increased its stake to just over seven per cent.
Ginni Rometty, IBM's chief executive, said the company was disappointed with its performance.
We saw a marked slowdown in September in client buying behaviour, and our results also point to the unprecedented pace of change in our industry.
On top of that "pace of change", IBM said demand had fallen from clients in the fast-developing Brics countries to the tune of seven per cent.
The company added it expects operating earnings per share of between two and four per cent lower than the $16.64 recorded last year, saying it will update the market on its 2015 guidance in January.