Big blues for IBM as sales, earnings miss estimates

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It was a rough quarter for IBM. Shares of the firm known as "Big Blue" sank 3% in after-hours trading Thursday following the release of first-quarter earnings and sales that came up short of forecasts.

CEO Ginni Rometty acknowledged that IBM (IBM) "did not achieve all of our goals" in the first quarter. She blamed the firm's failure to close "a number of software and mainframe transactions that have moved into the second quarter."

IBM's operating net income (excluding some acquisition- and retirement-related charges) for the quarter rose 3.4% compared to last year, to $3.4 billion, or $3 a share. Sales, however, slipped 5% to $23.4 billion.

Analysts surveyed by Thomson Reuters were expecting earnings of $3.05 a share on $24.6 billion in sales.

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IBM's businesses include software and hardware development, along with consulting and IT services. With its vast size and global footprint, investors tend to view the company's earnings as indicative of overall corporate technology spending and demand.

Despite the weak showing in the first quarter, the company reiterated its full-year guidance for 2013, projecting earnings of $16.70 a share.

IBM's sales fell around the world in the first quarter, including a 7% drop in the Asia-Pacific region. Its crucial services business had sales drop 4% to $9.6 billion, while software sales were flat at $5.6 billion. IBM's hardware sales fell 17% from last year, to $3.1 billion.

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