By Yasin Ebrahim
Investing.com - IBM (NYSE:IBM) reported on Monday first-quarter earnings that beat analysts' forecasts but revenue fell short of expectations, with little sign yet that Big Blue's acquisition of Red-Hat is paying off.
IBM shares lost 0.48% in after-hours trade following the report.
IBM announced earnings per share of $1.84 on revenue of $17.57 billion. Analysts polled by Investing.com anticipated EPS of $1.78 on revenue of $17.63 billion. That compared with an EPS of $2.25 on revenue of $18.18 billion in the same period a year before. IBM had reported EPS of $4.71 on revenue of $21.78 billion in the previous quarter. Analysts are expecting EPS of $2.56 and revenue of $18.21 billion in the upcoming quarter.
Cloud & cognitive software revenues rose 5% to $5.2 billion, with growth in cloud & data platforms, up 32% led by Red Hat, which IBM acquired last summer in a $34 billion deal,
But Red Hat saw the pace of revenue growth slow to 18% from 24% quarter-on-quarter.
Global business services revenue was flat at $4.1 billion, with growth in consulting, up 4%, but global technology services revenues fell 6% to $6.5 billion on-year.
Looking ahead, IBM withdrew its full-year 2020 guidance in light of the current Covid-19 crisis. "The company will reassess this position based on the clarity of the macroeconomic recovery at the end of the second quarter."
IBM shares are down 10% from the beginning of the year, still down 24.04% from its 52 week high of $158.75 set on February 6. They are outperforming the Dow 30 which is down 17.42% year to date.
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