IBM (NYSE: IBM) on Tuesday announced first-quarter net income of $2.9 billion, an increase of 10 percent over its $2.6 billion net income in the year-ago quarter.
On a per-share basis, Big Blue's Q1 diluted earnings were $2.31, up 17 percent from the $1.97 in the first quarter of 2010, while earnings excluding one-time items were $2.41, compared to $2.00 a year ago, an increase of 21 percent.
Revenue for the first quarter was $24.61 billion, up 7.7 percent from last year's revenue of $22.86 billion.
Consensus estimates called for net income of $2.30 a share on revenue of $24 billion.
Despite topping expectations, shares of IBM were down 1.19, or 0.7 percent, from Tuesday's closing price of 165.40.
One possible drag on IBM shares may have been the declining profit margin on global technology services, the company's biggest revenue generator. While Q1 revenue for this unit was $9.9 billion, 40 percent of total revenue and a gain of 6 percent from the year-ago quarter, its gross profit margin slipped to 33.8 percent from 34.2 percent in Q1 2010.
However, the company's overall gross profit margin was up to 44.1 percent from 43.6 percent.
In a statement accompanying the earnings, IBM chairman and CEO Samuel J. Palmisano said, “We delivered a strong first quarter with revenue growth across hardware, software and services and with more than 40 countries growing in double digits. We continued to see excellent momentum in our growth initiatives - smarter planet, cloud, business analytics, and growth markets."
Palmisano added, "On the strength of this performance, we are raising our full-year 2011 operating earnings per share expectations to at least $13.15.”
Previously IBM had forecast full-year earnings per share of $13.