IBM Earnings Top Estimates; Sales Miss
International Business Machines Corp. (IBM) (IBM), the world’s biggest computer-services provider, raised its full-year earnings forecast after posting a 7.1 percent increase in first-quarter profit, helped by software demand.
Operating earnings will increase to at least $15 a share this year, IBM said today, boosting its January forecast of at least $14.85. Analysts predicted $14.92, the average of estimates compiled by Bloomberg. The company also reported revenue for last quarter that increased less than 1 percent and fell short of projections.
IBM is making progress with a plan to make software, which is more profitable than hardware, account for half of profit as businesses and governments boost spending on programs that analyze data and project trends. Still, the impact to IBM’s revenue growth from Europe’s debt crisis may worry some investors, said Joseph Foresi, an analyst at Janney Montgomery Scott LLC in Boston.
“There’s still concern about public-sector spending,” Foresi, who recommends (IBM) buying IBM shares, said before the report. “With the recent data points coming out of Europe people are curious or concerned about European spending, and its potential implications.”
IBM fell 1.8 percent to $203.74 in extended trading after rising 2.3 percent in regular trading. Last month, the Armonk, New York-based company’s shares (IBM) closed above $200 for the first time, factoring in stock splits. Read More