ARMONK (dpa-AFX) - International Business Machines Corp. (IBM) said Wednesday after the markets closed that its first quarter profit fell 21% from last year, hurt by lower revenue as well as a hefty workforce rebalancing charge.
The company's quarterly earnings per share, excluding items, came in line with analysts' expectations, but its quarterly revenue fell short of analysts' forecast. At the same time, the company reiterated its full year 2014 earnings guidance.
'In the first quarter, we continued to take actions to transform parts of the business and to shift aggressively to our strategic growth areas including cloud, big data analytics, social, mobile and security,' said Ginni Rometty, IBM chairman, president and chief executive officer.
IBM shares are currently losing 4.02% in after hours trading after closing the day's regular trading session at $196.40, down 62 cents. The shares trade in a 52-week range of $172.19 to $211.98.
For the first quarter, Americas revenues fell 4% from last year to $9.6 billion and Asia-Pacific revenues slipped 12% to $5.0 billion, while Europe/Middle East/Africa revenues grew 4% to $7.6 billion. OEM revenues for the quarter dropped 17% from last year to $355 million.
Revenues from the company's growth markets fell 11% in the first quarter. Revenues in the so-called BRIC countries -- Brazil, Russia, India and China - dropped 11%.
The company's global technology services segment reported first quarter revenue of $9.3 billion, down 3% from a year earlier. Global business services segment's revenue for the quarter remained flat with last year at $4.5 billion. IBM is the world's biggest computer services firm.
The estimated services backlog at the end of the first quarter was $138 billion, up 1% adjusting for currency and excluding the divested customer care outsourcing business.
IBM's software revenue for the first quarter rose 2% year-over-year to $5.7 billion.
First quarter revenues from the company's Systems and Technology segment dropped 23% year-over-year to $2.4 billion, with revenues from System z mainframe server products down 40%. IBM is the world's biggest server maker.
In January, China's Lenovo Group Ltd., the world's largest PC maker, agreed to buy IBM's x86 server business for about $2.3 billion in a cash and stock deal.
For the first quarter ended March 31, 2014, the Armonk, New York-based technology giant reported net income of $2.4 billion or $2.29 per share, compared to $3.0 billion or $2.70 per share for the year-ago quarter.
Excluding items, operating earnings for the first quarter were $2.6 billion or $2.54 per share, compared to $3.4 billion or $3.00 per share in the prior year quarter.
On average, 21 analysts polled by Thomson Reuters expected the company to earn $2.54 per share for the first quarter. Analysts' estimates typically exclude special items.
Gross margin for the quarter improved to 46.9% from 45.6% a year ago on a reported basis, and improved to 47.6% from 46.7% last year on an adjusted basis.
Big Blue's total revenues for the first quarter fell 4% to $22.48 billion from $23.41 billion in the same quarter last year. Twenty analysts had a consensus revenue estimate of $22.91 billion for the first quarter.
IBM has been acquiring small companies to drive growth and expand product offerings. The company has plans to make $20 billion worth of acquisitions by 2015. During the fist quarter, IBM) completed the acquisition of Cloudant, Inc., a privately held database-as-a-service provider that enables developers to easily and quickly create next generation mobile and web apps.
For the full year 2014, the company continues to forecast earnings of at least $17.00 per share and operating earnings of at least $18.00 per share. Analysts currently expect the company to earn $17.84 per share for the full year 2014.
Copyright RTT News/dpa-AFX
© 2014 AFX News
