Strong sales of software, consulting and outsourcing services helped industry bellwether IBM increase profits during Q1, but currency volatility stymied sales growth.
Big Blue posted global first quarter revenue of $22.9bn (£14.8bn), up five per cent on the corresponding period last year, but flat when currency adjustments are made. Net income, adjusted for currency, spiked by five per cent annually to $2.6bn. Emerging markets provided almost a fifth of total sales and were IBM's fastest growing geographic segment. EMEA revenues effectively dropped two per cent to $7.6bn.
Currency-adjusted services revenue was down by two per cent annually, but there was an 18 per cent spike in the volume of consulting contracts, while outsourcing deals were up by six per cent. Software sales rose to $5bn, an effective increase of five per cent.
Big Blue's Systems and Technology division provided revenue of $3.4bn, a year-on-year increase of two per cent when currency fluctuations are factored in. Across all technology and services divisions, IBM claims "it expects constant currency revenue growth in the second quarter".
Chief executive Sam Palmisano said: “In the first quarter, we drove significantly improved revenue growth rates from the fourth quarter across our businesses and geographies. We had strong results in strategic investment areas including growth markets, business analytics and Smarter Planet solutions.
“Looking ahead, we are confident in our ability to grow revenue, and given our mix of higher-value business and productivity we will expand margins, grow profit, cash and EPS, and increase returns to shareholders.”
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