IBM raises full-year profit forecast but shares flat
BOSTON (Reuters) - IBM raised its profit forecast as the tech giant released quarterly earnings ahead of Wall Street projections, citing strong sales of its mainframe computers and brisk business in emerging markets.
Some investors were disappointed that the company did not raise its full-year forecast by a wider margin.
"The concern is they didn't really guide a whole lot higher than they had originally for the year, if you take into account the earnings surprise," said Fort Pitt Capital Group senior analyst Kim Caughey Forrest. "That's a little disappointing."
IBM shares were little changed, dropping to $165.36 from their New York Stock Exchange close of $165.40.
The world's largest technology services firm managed to beat expectations for the first quarter, even though it does about 11 percent of its business in crisis-stricken Japan.
That was partially because of strong performance in the red-hot markets of Brazil, Russia, India and China, where revenue was up a combined 26 percent from a year earlier.
"These numbers show IBM's resiliency. They beat on just about every area I had hoped," said Ted Parrish, co-portfolio manager of the Henssler Equity Fund.
International Business Machines Corp raised its forecast for full-year profit, excluding items, to at least $13.15 from its previous view of at least $13.00.
IBM benefited from strong demand for the latest version of its mainframe computer, which it introduced in the third quarter of last year. Sales of that product were up 41 percent from a year earlier.
The company also reported first-quarter profit, excluding items, of $2.41 per share, ahead of the average analyst forecast of $2.30, according to Thomson Reuters I/B/E/S.
Revenue rose 8 percent from a year earlier to $24.6 billion, beating the average analyst forecast of $24.0 billion.
(Additional reporting by Yinka Adegoke. Reporting by Jim Finkle, editing by Bernard Orr)