Iran · CNBC Technology
IBM shares drop as firm overtakes but opts to maintain guidance
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IBM shares slipped 6% in extended trading on Wednesday after the hardware, software and consulting provider reported stronger-than-expected first-quarter results but maintained full-year guidance.
Key facts
- IBM's first-quarter software revenue grew 11% to $7.05 billion, higher than the $7.02 billion consensus among analysts polled by StreetAccount
- Net income of $1.22 billion, or $1.28 per share, increased from $1.06 billion, or $1.12 per share, in the fourth quarter of 2024
- Revenue growth from Red Hat Enterprise Linux, stemming from IBM's $34 billion Red Hat acquisition in 2019, decelerated from the fourth quarter, said IBM's finance chief, Jim Kavanaugh
- Revenue from consulting, at $5.27 billion, was up 4%, coming in shy of StreetAccount's $5.28 billion consensus
Summary
Earnings per share: $1.91 adjusted vs. $1.81 expected. IBM's revenue grew 9% year over year in the quarter, according to a statement. Management reiterated its view for 2026, including over 5% revenue growth at constant currency and a $1 billion increase to free cash flow. "I don't think we've ever raised guidance in a first quarter," IBM's finance chief, Jim Kavanaugh, told analysts on a conference call.