US computer giant IBM on Monday reported a first-quarter net profit slightly better than forecast, but revenue fell short of expectations. IBM, which has weathered the global economic slowdown better than most major US corporations, said that net profit declined one percent in the first quarter compared with the same quarter last year to 2.29 billion dollars.
Revenue fell 11 percent to 21.7 billion dollars in the January-March period, below the 22.5 billion dollars expected by Wall Street analysts. Earnings per share were 1.70 dollars, up from 1.64 dollars per share in the same quarter last year and better than the 1.66 dollars per share expected by analysts.
IBM maintained its full-year 2009 earnings target of at least 9.20 dollars per share and president, chairman and chief executive Samuel Palmisano said it was "ahead of pace for our 2010 roadmap of 10 dollars to 11 dollars per share. "IBM continued to perform well in a very difficult economic environment," he said in a statement. "This was due to our long-term strategic focus: shifting into software and services, divesting of commodity businesses, and creating solutions that help clients reduce cost and conserve capital."
Palmisano, speaking on the same day that US business software giant Oracle swooped in and grabbed IBM acquisition target Sun Microsystems for 7.4 billion dollars, indicated that other takeover attempts could be in the offing. "We are well-positioned to continue to move aggressively and leverage our strong cash performance to make the most of the opportunities that arise, including smarter planet initiatives and other strategic options," he said.
IBM said it had 12.3 billion dollars of cash on hand at the end of March. IBM chief financial officer Mark Loughridge played down Oracle's purchase of Sun, whose board of directors reportedly rejected IBM's takeover offer. "We've been competing with Sun. We know Oracle inside out," Loughridge said in a conference call with analysts after the quarterly earnings were released.
"They now have the same address and the same mailbox, but we're talking about the same team that we've been competing against for some time, and winning on the field," he said. IBM said revenue fell across all of its business units from software to systems to business and technology services during the quarter and around the world.
First-quarter revenue for the Americas fell seven percent to 9.3 billion dollars while revenue from Europe, the Middle East and Africa was down 18 percent at 7.2 billion dollars, it said. Revenue from the Asia-Pacific decreased six percent to 4.8 billion dollars.
IBM's share price lost 1.67 percent to 98.75 in after-hours electronic trading in New York.