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IBM shares skidded deep into the red in pre-market trading on Wednesday after it posted its 20th straight quarter of sales decline, leaving Big Blue poised for its worst day in nearly a year.

The Armonk, New York-based technology group said its revenues slipped 3 per cent year-on-year to $18.2bn in the first quarter, missing analyst estimates of a slimmer fall to $18.4bn. Gross profit margin, an important gauge of profitability, meanwhile, fell to 42.8 per cent from 46.5 per cent in the first quarter of 2016.

Chief executive Ginni Rometty has been working to revive the more than century-old company’s sales with a focus on forward-looking “strategic imperatives”, like cloud, and the Watson artificial intelligence system that IBM hopes will disrupt fields as far-ranging as healthcare and marketing (it has already had some success on the Jeopardy circuit). While revenues from strategic imperatives rose 12 per cent in the first quarter, the deterioration of IBM’s core business of technology consulting and business hardware continued to weigh.

“Unfortunately, there was very little in the [first quarter] report to incrementally support our positive thesis – [the Global Business Services division] did not break trend, the gross margin deteriorated for all segments and the outsourcing business showed some signs of duress, even if temporary, which diminishes visibility in an already back-end weighted year,” said Stifel analyst David Grossman.

“While the stock is likely to remain under pressure the next three months, we continue to believe that IBM is doing the right things to position themselves for longer-term sustainable growth, even if the transition is testing our patience”.

IBM’s shares skidded 5.3 per cent in pre-market trading, which would mark the worst day since the market turmoil that followed the Brexit vote last June. The fall in IBM’s shares will strip about 60 points from the price-weighted Dow at the open, based on Financial Times calculations.

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