IBM (IBM) posted mixed results for its fiscal first quarter after markets had closed on Tuesday, with adjusted earnings coming in ahead of analysts’ expectations while revenue fell short.
The Armonk, New York-headquartered technology company generated $18.18 billion in revenue in the first quarter, down 4.7% from $19.07 billion a year earlier and below the consensus estimate of analysts polled by Capital IQ for $18.53 billion.
Adjusted earnings per share came in at $2.25, down 8% from a year earlier, but ahead of analysts’ projections for $2.24 per share.
Broken down by business segment, Cloud and Cognitive Software revenues were worth $5.0 billion, down 2% year-on-year, led by cognitive applications, up 2% and by cloud and data platforms, down 2%. Global Business Services revenues were worth $4.1 billion, flat year on year, with growth registered in the segment’s consulting and global process services.
The company’s Global Technology Services segment’s revenues were worth $6.9 billion, down 7% year-on-year with growth in hybrid cloud revenue. Systems revenues were worth $1.3 billion, down 11% and Global Financing revenues were worth $406 million, flat year on year.
“Our results reflect the fundamental changes we have made to our business, allowing us to generate greater operating leverage. In the first quarter, we significantly expanded profit margins, led by our services businesses,” James Kavanaugh, chief financial officer of IBM, said. “Our focus on prioritizing our investments in the emerging high-value segments of our industry has enabled us to drive higher profitability and strong cash generation.”
For 2019, the company is targeting adjusted earnings per share of at least $13.90. Capital IQ is projecting adjusted earnings per share of $13.92 for the full year.