IBM reveals profits warning

IBM has shocked investors by warning of a shortfall in its first-quarter profits.

The company says its first-quarter revenues will be around £13 bn (€21bn) down from £14.5bn (€23.7bn) a year earlier.

IBM blamed technology spending cutbacks by corporate customers.

"As I said during our last analyst call in January, the business environment remains tough. We saw a continued slowdown in customer buying decisions in the first quarter," said IBM chief financial officer John Joyce.

According to Merrill Lynch analyst Steve Milunovich, the earnings revision does not necessarily show that IBM's business is getting worse.

"It is not clear to us as to whether the business is getting that much worse or this announcement reflects the inclinations of the new chief executive," the analyst said in a note to clients.

Last Friday, the company laid off 600 workers in its Global Services division.