Weak dollar helps to boost IBM sales

IBM shares continue to rise.Click chart to track IBM shares. By Charles Riley, staff reporter


NEW YORK (CNNMoney) -- IBM reported better than expected first quarter earnings Tuesday, and raised its outlook for the rest of 2011, citing strong growth.

The tech giant said its profits for the first quarter rose 10% from last year to $2.9 billion, or $2.31 per share.

Excluding one-time charges, earnings per share were $2.41 a share. Analysts polled by Thomson Reuters had expected earnings of $2.30 per share.

IBM also reported revenue of $24.6 billion, up 8% from a year ago. After adjusting for foreign exchange rates though, sales were only up by 5%. IBM, thanks to its expansive overseas operations, benefits from a weak dollar.

Investors weren't that enthusiastic though. IBM shares fell about 1% in trading after the closing bell.

IBM (IBM, Fortune 500), a component of the blue-chip Dow Jones industrial average, is the world's largest IT company in terms of sales. Wall Street looks to Big Blue's earnings as an indicator of how much businesses are spending on technology.

"We delivered a strong first quarter with revenue growth across hardware, software and services and with more than 40 countries growing in double digits," IBM CEO Samuel Palmisano said in a statement.

That growth led IBM to raise its outlook for the rest of the year. The company now says it expects earnings per share for the year to top $13.15, up from $13.00.

Strong sales in developing markets buoyed IBM, with revenues increasing 26% in Brazil, Russia, India and China. Meanwhile, revenues from Europe, the Middle East and Africa grew only 3%.

Far removed from its days as a struggling PC manufacturer, IBM -- or International Business Machines -- scored a bit of a public relations coup last quarter.

The company's Jeopardy-playing supercomputer, dubbed Watson by its creators, cleaned house against the best players in the world in a televised extravaganza.

The traditionally insulated tech sector has not been immune to the global recession, and faced another big scare earlier this quarter when Japan was rocked by a massive earthquake and tsunami that jeopardized revenue.

After the quake and tsunami, IBM shares took a dive, losing about 5% of their value before mounting a recovery. Around 11% of IBM's revenue results from business in Japan.

CFO Mark Loughridge said during a conference call that because much of IBM's sales from Japan come from its services unit, the company did not "see a big change in the trajectory of business" in the wake of the natural disasters in March.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,805.41 127.51 0.76%
Nasdaq 4,483.72 30.93 0.69%
S&P 500 1,964.58 13.76 0.71%
Treasuries 2.27 -0.00 -0.09%
Data as of 11:42pm ET
Company Price Change % Change
Ford Motor Co 13.78 -0.62 -4.31%
Microsoft Corp 46.13 1.11 2.47%
Apple Inc 105.22 0.39 0.37%
Bank of America Corp... 16.72 0.12 0.72%
Yahoo! Inc 43.50 0.90 2.11%
Data as of 4:03pm ET

Sections

New York headlines took a straight forward and direct approach with NYC's Ebola news. More

The midterm elections are around the corner, and the economy remains a top concern. With unemployment down and inflation low, why do people still feel the economy stinks? More

Shares of Facebook recently topped $80. They've more than quadrupled from their post-IPO lows of two years ago. Can Mark Zuckerberg keep the momentum in mobile going? More

Using technology developed for the military and implemented in Iraq, schools have installed alarm systems that detect gunfire. More

If you're looking to fly this holiday season, the clock's ticking to get the best prices. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.