IBM's first quarter was a mixed bag relative to expectations.
Big Blue reported first quarter earnings of $3.1 billion, or $2.61 a share, on revenue of $24.7 billion, a tally that was flat from a year ago. Non-GAAP earnings were $2.78 a share. Wall Street was looking for earnings of $2.65 a share on revenue of $24.77 billion.
The company raised its 2012 earnings outlook to $14.27 a share from at least $14.16 a share. Non-GAAP earnings will hit at least $15 a share, up from IBM's previous outlook of $14.85 a share.
Wall Street was looking for earnings of $14.94 a share for 2012.
IBM's first quarter lined up similar to previous ones. Services backlog was flat, hardware was pressured and emerging markets, analytics and cloud represented growth.
On a conference call with analysts, IBM CFO Mark Loughridge said:
- The launch of IBM's PureSystems is expected to contribute to revenue in the second half of the year.
- IBM closed five acquisitions in the quarter valued at $1.3 billion.
- The company touted gains in the Unix market.
IBM is seeing stability in Europe. Loughridge said:
The most consistent performance has come from the UK and Spain with 10% growth, the UK has delivered 10 consecutive quarters of growth. And Spain continues to leverage its global relationships, now growing in each of the last six quarters. Germany posted modest growth while France declined.
By the numbers:
- Americas first quarter revenue was $10.5 billion, up 1 percent. Revenue from Europe, Middle East and Africa was $7.6 billion, down 2 percent. Asia Pacific revenue was up 4 percent to $6.1 billion.
- Sales in the BRIC countries---Brazil, Russia, India and China---jumped 10 percent.
- Global technology services revenue was up 2 percent in the first quarter to $10 billion. Business services revenue fell 2 percent to $4.6 billion.
- Software revenue was $5.6 billion, up 5 percent from a year ago. Middleware sales were up 7 percent from a year ago and operating systems revenue was up 9 percent.
- Hardware and systems revenue was $3.7 billion, down 7 percent from a year ago. Power Systems sales were flat as were System x revenue.