International Business Machines Corp. (NYSE:IBM) will post its first quarter results after the market close Wednesday, and is expected to witness its eighth consecutive revenue decline quarterly. The tech company has been struggling with its hardware business owing to lower industry spending on information technology and weakness in emerging markets and China.

IBM

Revenue, EPS expected to decline

For the quarter, consensus estimates are for revenue to come in at $22.9 billion, which is a decline of 2% from the quarter, last year. Earnings per share are expected at $2.54, a decline of 15% from last year.  International Business Machines Corp. (NYSE:IBM) has been witnessing a growth in EPS in the last two quarters. For the quarter, IBM will take a charge of around $1 billion related to workforce rebalancing.

For 2014, IBM expects operating earnings of “at least $18” per share, which is an increase of 11% from last year. For 2015, the tech company reiterated its EPS outlook of $20.

International Business Machines Corp. (NYSE:IBM) blamed the weak performance from servers, mainframes and other hardware products for the fourth quarter revenues that missed the estimates.  For the systems and technology unit, revenue declined 26% to $4.3 billion in the fourth quarter. The tech firm’s services business has also been struggling with revenues down 4%, in the fourth quarter. Analysts expect the trend to continue in the first quarter, as well.

IBM in a transition phase

International Business Machines Corp. (NYSE:IBM) has been making a transition from low-margin hardware business to high-margin enterprise software and services. In January, the company revealed its decision to sell its low-end hardware server business to China’s Lenovo for $2.3 billion. Earlier this year, the company, also, announced plans to invest over $1.2 billion to develop around 15 new data centers to boost its cloud computing presence across five continents.

Yesterday, Citigroup lowered the rating on IBM from Buy to Neutral expecting EPS growth to slow down through 2020 as the company invests more in cloud computing services.

Analyst Amit Daryanani at RBC Capital Market believes a better second half of the year is in the cards, but “we think management will remain cautious as we expect the March quarter to be flat-to-down relative to expectations.”

Year to date, International Business Machines Corp. (NYSE:IBM) shares have been down 5%. On Tuesday, shares were down 0.38% at $197.02.