International Business Machines (NYSE: IBM) reported an 8% fall in first-quarter earnings to $2.25 per share, as revenues declined 4.7% to $18.2 billion. Analysts were expecting the Armonk, New York-based firm to post earnings of $2.21 per share on revenue of $18.65 billion.
Shares of IBM fell 2.4% during aftermarket trading on Tuesday. The stock has gained about 26% since the beginning of this year.
CEO Ginni Rometty said, “In the first quarter, our cloud revenue growth accelerated, and we again grew in key, high-value areas in Cloud and Cognitive Software and in consulting.”
Revenue from Cloud & Cognitive Software was $5.0 billion in Q1, down 2% year-over-year. Adjusted for currency fluctuations, revenue was up 2%.
For full-year 2019, IBM continues to expect adjusted operating earnings to be at least $13.90 per share and GAAP earnings of $12.45 per share or above. Cash flow is touted to be about $12 billion for the year.
IBM’s focus on hybrid cloud and its $34-billion acquisition of Red Hat (NYSE: RHT) are likely to become discussion points during the post-earnings conference call. The Red Hat acquisition is expected to close in the second half of 2019.
Apart from the Red Hat acquisition, investors will be looking to see what the management thinks about its focus on cryptocurrency and blockchain technology.