IBM blew past first-quarter earnings estimates Wednesday, posting earnings of $1.65 per share.
Wall Street had expected Big Blue to post earnings of $1.45 a share on revenue of $23.7 billion for the quarter, according to Thomson Financial. Instead, IBM posted an 11 percent increase in first quarter revenue to $24.5 billion, compared with the same period last year.
IBM, cited strong performances in its Global Technology Services unit, which posted a 17 percent increase in revenue to $9.7 billion, as well as double-digit growth with its Global Business Services, also up 17 percent to $4.9 billion.
Software revenue also jumped, rising 14 percent to $4.8 billion in the quarter. Driving that growth was a double-digit rise in IBM's middleware products WebSphere, Information Management, Tivoli, Lotus, and Rational software.
"IBM had a very good quarter and a good start in 2008," Samuel Palmisano, IBM chief executive, said in a statement. "Our performance is a tribute to the way we have repositioned our company over the past several years, as well as the hard work of IBMers across the globe."
And, perhaps more importantly, Palmisano said: "We feel good about the rest of the year."
Indeed. IBM raised its guidance to $8.50 a share, according to a report on MarketWatch.
Previously, Wall Street has been forecasting IBM to earn $8.25 per share for the year on revenue of $104.8 billion.
Shares of IBM rose about 3 percent, or $3.53, to $124 in after-hours trading. Big Blue, which reported its financial results after the markets closed, ended the regular trading day at $120.47, up about 3 percent.