IBM (NYSE: IBM) shares are gaining premarket Thursday after the company topped profit estimates when it reported first-quarter earnings on Wednesday after the close.
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IBM posted adjusted earnings per share of $1.36, above consensus estimates of $1.26. However, revenue came in at $14.25 billion, below expectations of $14.35 billion. Revenue rose 0.4% year-over-year.
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Split into its three segments, IBM’s Software revenue rose 3% to $5.92 billion, its Consulting revenue also grew 3% to $4.96 billion, and its Infrastructure revenue fell 4% to $3.01 billion.
The company’s shares are currently up 1.75% premarket, trading around the $128.50 mark.
“Our first quarter results demonstrate that clients continue turning to IBM for our unique combination of an open hybrid cloud platform, enterprise-focused AI, and business expertise to unlock productivity and drive efficiency in their operations,” commented Arvind Krishna, IBM chairman and chief executive officer.
The technology firm’s senior vice president and chief financial officer, James Kavanaugh, stated: “In the quarter, we remained focused on the fundamentals of our business, increasing productivity and generating operating leverage.”
“As a result, we again expanded our gross profit margin, improved our underlying profit performance and increased our cash generation.”
IBM believes it is well-positioned to continue investing for growth and returning value to shareholders through dividends.
Looking ahead, the company expects constant currency revenue growth of between 3% to 5%, with free cash flow expected to be about $10.5 billion.
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