IBM Reports Mixed Q1, Pulls Full Year Guidance

IBM topped analysts' first quarter earnings expectations but missed on revenue guidance.
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Shares of IBM  (IBM) - Get Report were volatile after hours Monday after the company reported first quarter earnings that topped estimates but revenue that missed expectations.

The Armonk, New York-based company reported first quarter earnings of $1.84 on revenue of $17.6 billion, a 3.4% year over year decline. Analysts were expecting the company to report earnings of $1.79 per share on revenue of $17.62 billion. 

At last check, shares were down 1.2% after hours to $118.95 after rising 0.2% during the day's session. 

"Our first-quarter performance in cloud is a reflection of the trust clients place in IBM's technology and expertise today, and positions us to continue building an enduring hybrid cloud platform for the future," said IBM CEO Arvind Krishna, who earlier this year took over the reins of the company from Ginny Rometty. 

According to IBM, revenues from cloud and cognitive software, which includes its recently purchased Red Hat subsidiary, cognitive applications and transaction processing platforms, rose 5% to $5.4 billion. Red Hat saw revenue climb 18%.

The company also announced that it is withdrawing its full-year 2020 guidance due to the lack of visibility caused by the coronavirus pandemic. 

"We’ve taken actions within our business to provide the necessary flexibility and operating efficiency for the current environment,” James Kavanaugh, IBM senior vice president and CFO said. 

The company closed the first quarter with $12 billion in cash on hand.

IBM's global business services segment, its second biggest money maker, saw revenues flat year over year at $4.1 billion. Its systems segment saw revenue rise 3% to $1.4 billion.  

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