IBM Profit Falls, Sales Misses View - Update

(RTTNews) - International Business Machines Corp. (IBM) Tuesday reported a drop in profit for the first quarter, as the company reported a lower-than-expected sales. Moving ahead, the company reiterated its full year outlook.

Armonk, New York-based IBM's first-quarter profit dropped to $1.75 billion or $1.86 per share from $2.02 billion or $2.09 per share last year.

Excluding one-time items, earnings from continuing operations rose to $2.38 per share from $2.35 per share last year. Analysts had a consensus earnings estimate of $2.35 per share for the quarter.

IBM's first-quarter revenues dropped to $18.16 billion from $18.68 billion last year. This marks the 20th straight quarter the company has reported lower revenues. Analysts polled by Thomson Reuters expected revenues of $18.39 billion for the quarter.

IBM is divesting off its low-margin and unprofitable hardware businesses to improve profitability. The company is now striving hard to make IBM a company that provides cloud computing and data analytics.

Chief Executive Ginni Rometty said, ""In the first quarter, both the IBM Cloud and our cognitive solutions again grew strongly, which fueled robust performance in our strategic imperatives. In addition, we are developing and bringing to market emerging technologies such as blockchain and quantum, revolutionizing how enterprises will tackle complex business problems in the years ahead."

First-quarter cloud revenues increased 33 percent to $3.5 billion, the company said. Revenues from analytics increased 6 percent, while revenues from mobile rose 20 percent and revenues from security improved 9 percent.

Looking forward to 2017, the company continues to expect adjusted earnings of at least $13.80 per share. Analysts currently estimate earnings of $13.78 per share.

IBM closed Tuesday's trading at $170.05, down $1.05 or 0.61% on the NYSE. The stock further slipped $6.48 or 3.81% in the after-hours trading