IBM reports sales light, but sees strong earnings outlook

IBM services backlog is flat, hardware is pressured, and emerging markets, analytics, and cloud show growth for the quarter.

IBM's first quarter was a mixed bag relative to expectations.

Big Blue reported first quarter earnings of $3.1 billion, or $2.61 a share, on revenue of $24.7 billion, a tally that was flat from a year ago. Non-GAAP earnings were $2.78 a share. Wall Street was looking for earnings of $2.65 a share on revenue of $24.77 billion.

The company raised its 2012 earnings outlook to $14.27 a share from at least $14.16 a share. Non-GAAP earnings will hit at least $15 a share, up from IBM's previous outlook of $14.85 a share.

Wall Street was looking for earnings of $14.94 a share for 2012.

IBM's first quarter lined up similarly to previous ones. Services backlog was flat, hardware was pressured, and emerging markets, analytics, and cloud represented growth.

By the numbers:

  • Americas first quarter revenue was $10.5 billion, up 1 percent. Revenue from Europe, Middle East, and Africa was $7.6 billion, down 2 percent. Asia Pacific revenue was up 4 percent to $6.1 billion.
  • Sales in the BRIC countries -- Brazil, Russia, India, and China -- jumped 10 percent.
  • Global technology services revenue was up 2 percent in the first quarter to $10 billion.
  • Business services revenue fell 2 percent to $4.6 billion.
  • Software revenue was $5.6 billion, up 5 percent from a year ago. Middleware sales were up 7 percent from a year ago and operating systems revenue was up 9 percent.
  • Hardware and systems revenue was $3.7 billion, down 7 percent from a year ago. Power Systems sales were flat as were System x revenue.

This story originally appeared at ZDNet's Between the Lines under the headline "IBM Q1 sales light, earnings outlook strong."

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