Trump announces trade deal with EU following months of negotiations
Investing.com - IBM reported Wednesday first-quarter results that topped analysts’ analysts and maintained its annual guidance despite tariff uncertainty, as ongoing artificial intelligence demand underpinned bookings growth at its key software segment.
But IBM (NYSE:IBM) flagged that 15 of its government contracts had been scrapped due to a cost-cutting push by the Trump administration, sending its shares sharply lower in premarket U.S. trading.
IBM announced adjusted earnings per share of $1.60 on revenue of $14.54 billion. Analysts polled by Investing.com anticipated EPS of $1.42 on revenue of $14.41 billion.
The beat was driven by strong performance in its company’s software segment, which saw revenue up 7% in the first quarter from the same period a year earlier, with Hybrid Cloud, powered by Red Hat, up 12%. Consulting revenue was down 2% to $5.1B in the first quarter from a year earlier, while infrastructure revenues fell 6% to $2.9 billion.
"There continues to be strong demand for generative AI and our book of business stands at more than $6 billion inception-to-date, up more than $1 billion in the quarter," the company said.
For the second quarter, the company expects revenue to be in the range of $16.40 billion to $16.75 billion, compared with estimates for $16.31 billion. IBM also backed its forecast for full-year revenue growth of at least 5%.
"We see the selloff in the stock as overdone, given in-line Software (ETR:SOWGn) and Consulting revenue and free cash flow performance despite increasing macro headwinds," analysts at Goldman Sachs led by James Schneider said in a statement.
(Scott Kanowsky contributed reporting.)