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 16,563.30 -317.06 -1.88%
Nasdaq 4,369.77 -93.13 -2.09%
S&P 500 1,930.67 -39.40 -2.00%
Treasuries 2.56 0.00 0.08%
Data as of 12:34am ET
Company Price Change % Change
Bank of America Corp... 15.25 -0.33 -2.12%
Micron Technology In... 30.55 -1.98 -6.09%
Apple Inc 95.60 -2.55 -2.60%
Facebook Inc 72.65 -2.03 -2.71%
Pfizer Inc 28.70 -0.56 -1.91%
Data as of Jul 31

Sections

Malaysia Airlines was in major trouble even before the twin disasters of Flight 370 and Flight 17 claimed the lives of 537 people. More

With RadioShack burning through cash, investors and credit rating agencies believe its days are numbered. More

LinkedIn shares surged in after-hours trading Thursday following strong second-quarter earnings, following the likes of Facebook and Twitter. More

Terrell White has had a profit-sharing plan for his employees since 1981, believing that if the staff isn't happy, guests won't be either. More

The Mason family, which has been struggling to pay the $100,000 student loan bill they were left with when their daughter passed away five years ago, is now seeing an outpouring of support. More

Market indexes 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. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.