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IBM Q1 earnings up 10 percent

IBM reported positive net income gains for the first quarter, due in part by strong performance from their hardware division.

IBM’s net income rose by 10 percent to $2.86 billion, or $2.31 per share. In the year ago period IBM earned $2.6 billion, or $1.97 per share. Revenue also rose 8 percent to $24.6 billion. Analysts had predicted $24.02 billion which shows higher than expected levels of performance from the computer and consulting services organisation.

IBM have said that they expect full year operating earnings of $13.15 (or more) up from an earlier forecast of $13. Their goal for 2015 is to boost that to $20 a share, and they claim they are on their way to getting there.

Tony Sacconaghi, an analyst at Sanford Bernstein said on a conference call that service contract signings were down 18 percent compared to last year, which surprised him. In defense of this IBM Chief Financial Officer Mark Loughridge said it was natural for the signings to be down after a strong fourth quarter.

This all comes as good news for IBM, because investors had been fearing that the economic disruption in Japan after the earthquake could have affected IBM. Analyst Bob Djurdjevic with Annex Research said that IBM should be relieved that the impact was minimal. It also highlights that IBM aren’t dependent on any one market or product. IBM’s revenue from China rose 33 percent and Russia shows gains of a staggering 53 percent.

“When one part fails, another part more than makes up for it,” Djurdjevic said. Also noteworthy are reports that the U.S. and Asia, excluding Japan were strong markets for IBM, however Europe didn’t show good growth at all.

KitGuru says: Hardware accounts for 16 percent of IBM’s revenue.

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