5 Companies That Had A Rough Week
The Week Ending July 21
Topping this week's roundup of those having a rough week is IBM, which reported its 21st straight quarter of declining sales.
Also making the list this week are Microsoft, which within an otherwise bullish Q4 earnings report disclosed that its mobile phone sales are so small as to be "immaterial"; Cisco, which scrambled to fix a vulnerability in its WebEx software; employees at supercomputer maker Cray, who faced layoffs; and Arista Networks, which lost the latest round in a long-running legal battle with Cisco.
Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves – or just had good luck – check out this week's Five Companies That Came To Win roundup.
IBM Reports 21st Straight Quarter Of Declining Revenue
IBM this week reported modest gains in its "strategic imperative" businesses in the company's second quarter. But there was no overlooking the 5 percent year-over-year revenue decline, marking the company's 21st straight quarter of shrinking sales.
The company touted its earnings, which beat Wall Street expectations, but analysts attributed those results to a lower tax rate.
While IBM reported growth in such areas as cloud computing, analytics, mobile and security, it wasn't enough to offset declining sales of legacy products. Revenue from the company's systems business, for example, declined more than 10 percent to $1.75 billion in the quarter, from $1.95 billion a year before.
What's more, the rate of revenue decline was the highest since the fourth quarter of 2015.
It's Official: Microsoft's Phone Business Is Now 'Immaterial'
Microsoft reported its fiscal 2017 fourth quarter results this week. And while the results were generally good, fueled by growth in the vendor's cloud computing offerings, a close reading of the company's financial statements makes it clear that its mobile phone business is moribund.
In the results, the company noted that its phone business had declined from $361 million in the same quarter one year ago to an "immaterial" amount in the just-completed quarter – meaning the sales number was so small as to be too insignificant enough to report.
What's more, Microsoft recorded $630 million in asset impairment charges in the quarter related to its phone business and $480 million of restructuring charges, including employee severance expenses and contract termination costs primarily related to phone business restructuring.
Cisco Fixes Another Critical Bug In WebEx Extension
Cisco developers scrambled this week to fix a critical vulnerability in browser extensions for its WebEx collaboration and conferencing software that could be exploited by attackers executing arbitrary code to remotely control a computer.
Tens of millions of computers are believed to be running the WebEx extensions for Chrome and Firefox browsers, making them vulnerable to an attack, according to a ThreatPost report.
The remote code execution bug in the WebEx extensions was discovered by Google Project Zero researcher Tavis Ormandy and Divergent Security's Cris Neckar, ThreatPost said. Another vulnerability was discovered in the WebEx extensions earlier this year by Ormandy.
The bug is due to a design defect in the extension. Cisco said it knows of no attacks that have exploited the vulnerability.
Arista Networks Loses Latest Legal Round With Cisco
The International Trade Commission this week upheld its earlier decision to ban the importation and sale of some Arista Networks switching products, handing the company a loss in its long-running patent battle with Cisco.
Arista had sought to overturn the ITC's May 4 ruling that banned the import of Arista switches that Cisco says infringe on Cisco patents.
Arista had filed an emergency petition for the ITC to overturn its ruling after the U.S. Patent and Trademark Office found the relevant Cisco patents to be invalid. But the ITC denied Arista's petition, saying the USPTO appeal process had not been exhausted and so was not final.
Supercomputer Maker Cray Lays Offs 15 Percent Of Workforce In Restructuring
It's been a tough week to be an employee at storied supercomputer manufacturer Cray. This week, the company disclosed that it's cutting about 15 percent of its workforce – approximately 190 workers – in a restructuring effort to cut costs amid slowing sales.
Seattle-based Cray disclosed the restructuring and layoffs in a regulatory filing with the U.S. Securities and Exchange Commission on Tuesday.
Cray said the cuts are expected to save it about $25 million a year in operating costs. The restructuring will cost the company about $10 million in expenses, mostly severance payments.