IBM does enough in Q1 to keep investors happy

IBM has delivered its latest set of quarterly numbers indicating that the business continues to expand in the cloud but contract in other areas

Big Blue has reported its first-quarter earnings, topping analyst’s expectations despite the tough forex headwinds.

Revenue fell to $19.59bn, down 12% YoY, with non-GAAP earnings of $2.9bn – or $2.91 a share. 

IBM will no doubt breathe a sigh of relief, clearing Wall Street’s expectations of $2.80 a share on revenue of $19.64bn. 

The world’s largest tech services company, which gets more than half of all revenue from outside the US, said that it now expects the surging dollar to have a 7% negative impact over the full year.

Digging into the headline figures, Big Blue’s software business continued to bleed money like a haemophiliac with multiple gunshot wounds to the chest. The division brought in $5.3bn in revenue, a 7% decrease on the previous quarter and 8% drop year-on-year.

But with the IBM’s future resting firmly on its cloud and analytics businesses, the Armonk, New York-based company pulled it out where it really mattered. The cloud business pulled in $3.8bn in revenue, a 60% increase year-on-year, while the analytics division grew by 12%.

Investors are showing a surprising degree of patience with IBM as it slowly sheds off its legacy businesses in favour of high growth markets; but with the results marking the 12th straight quarter of declining revenue, many shareholders will surely be limbering up, getting ready to jump ship.

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