IBM Climbs on Earnings Beat as Cloud Revenue Increases

IBM's total cloud revenue for the first quarter jumped 21% year-over-year to $6.5 billion,
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Shares of IBM  (IBM) - Get Report were rising Monday after the IT giant reported first-quarter results that topped analyst estimates. 

The Armonk, New York-based company reported first quarter, non-GAAP earnings of $1.77 per share on revenue of $17.7 billion. Analysts polled by FactSet were expecting earnings of $1.69 per share on revenue of $17.32 billion. 

"Strong performance this quarter in cloud, driven by increasing client adoption of our hybrid cloud platform, and growth in software and consulting enabled us to get off to a solid start for the year," said CEO Arvind Krishna.

IBM shares were rising 2.9% to $136.95 after hours Monday. 

Total cloud revenue jumped 21% to $6.5 billion, while the company's cloud and cognitive software unit saw revenues rise nearly 4% to $5.4 billion. IBM's global business services unit saw revenue rise 2.4% to $4.2 billion, while global technology services reported revenue of $6.4 billion, down 1.5% year-over-year. 

For the year, the company expects adjusted free cash flow between $11 billion and $12 billion, excluding about $3 billion of cash impacts from the company's plan to lay off about 10,000 workers in Europe amid cost cuts in its services unit. 

IBM CEO Arvind Krishna, who assumed the job in April, is pursuing efforts to streamline the company’s operations and gain traction amid the ongoing shift by companies and organizations to cloud-based computing. 

There have been recent reports that the company is seeking to sell its Watson Health division