International Business Machines (IBM) this afternoon reported Q1 revenue that missed analysts’ expectations, but turned in profit per share ahead of consensus, and raised its year profit outlook, with growth in the company’s software division offset by weakness in its technology division and lackluster growth in its services business.
Revenue in the three months ended in March was flat with the prior-year results, at $24.7 billion, yielding EPS of $2.78.
Analysts had been modeling $24.82 billion and $2.66 per share.
IBM’s CEO Ginni Rometty remarked said, “We delivered another excellent software performance, expanded services margins, and continued the momentum in our growth initiatives.”
Software revenue rose 5%, year over year, or 7% on a constant-currency basis. Services revenue rose 1%. Systems and technology revenue fell 7%, or 6% on a constant-currency basis.
The company’s “Power” line of servers saw revenue unchanged from the year-earlier period. “System Z” mainframe product revenue was down 25%. Storage revenue was down 4%, while microelectronics revenue fell 13%.
Within services, the company’s “Global Technology Services” business saw revenue rise 2%, while Global Business Services revenue was down 2%.
IBM raised its outlook for this year’s profit per share, excluding some costs, to “at least $15″ from a prior view of at least $14.85. That is ahead of the consensus $14.93 per share.
IBM shares are down $5.10, or 2.5%, to $202.32 in late trading. Shares of services competitor Accenture (ACN) were also down, falling 58 cents, or 0.9%, to $63.60.
IBM will hold a conference call�with analysts at 4:30 pm, Eastern time, and you can catch the webcast of it here.
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