informa
/
1 MIN READ
News

IBM First-Quarter Earnings Up 12%

Revenue climbed 7% to $22 billion, while net income increased 8% to $1.8 billion for the quarter.
IBM said Tuesday that first-quarter earnings per share rose 12% on the strength of increased sales of high-margin products and services such as information management software and consulting.

For the three months ended March 31, IBM said earnings rose 12% year over year to $1.21 per share, in line with analysts' estimates. Revenue climbed 7% to $22 billion, while net income increased 8% to $1.8 billion.

"We continued to grow in the higher-value products and services that help our clients transform their businesses," IBM CEO Sam Palmisano said in a statement.

The company's Global Services unit -- which specializes in consulting, outsourcing, and systems integration services -- posted an 8% year-over-year sales gain. Software revenue, led by strong sales of middleware brands such as WebSphere, Tivoli, and Lotus, increased 9% overall.

The robust performance did not extend to some key hardware lines, however. Sales of midrange Unix- and Linux-based System i servers were off 13%, while storage product sales declined 1%. Overall, IBM's Systems and Technology hardware group posted a 2% year-over-year sales gain for the quarter.

Of late, Palmisano has been looking to rid IBM of weak-performing hardware offerings. In January, the company announced a $725 million deal to sell its lackluster printer business to Ricoh. In April 2005, Palmisano spun off IBM's storied PC business, selling it to China's Lenovo Group for $1.75 billion.

Editor's Choice
Brian T. Horowitz, Contributing Reporter
Samuel Greengard, Contributing Reporter
Nathan Eddy, Freelance Writer
Brandon Taylor, Digital Editorial Program Manager
Jessica Davis, Senior Editor
Cynthia Harvey, Freelance Journalist, InformationWeek
Sara Peters, Editor-in-Chief, InformationWeek / Network Computing