IBM (NYSE:IBM) shares fell more than four per cent in premarket trade Friday, after the company reported first quarter results that missed analysts' expectations as it failed to close some major deals.
For the quarter that ended March 31, net income was $3.03 billion or $2.70 per diluted share, compared to $3.06 billion or $2.61 per share, a year ago.
Excluding certain charges, income rose three per cent to $3.4 billion or $3 per share.
Total revenues dropped five per cent to $23.4 billion, or three per cent when adjusting for currency impacts, the company said.
Analysts surveyed by Thomson Reuters had called for per share earnings of $3.05 on $24.6 billion in revenue.
“In the first quarter, we grew operating net income, earnings per share and expanded operating margins, but we did not achieve all of our goals in the period,” said chairman, president and CEO Ginni Rometty. “Despite a solid start and good client demand we did not close a number of software and mainframe transactions that have moved into the second quarter.
“Looking ahead, in addition to closing those transactions, we expect to benefit from investments we are making in our growth initiatives and from the actions we are taking to improve under-performing parts of the business.”
Rometty said the world's largest provider of computer services still expects full-year 2013 operating earnings per share of at least $16.70.
By region, IBM said the Americas’ first-quarter revenues decreased four per cent, as did revenues in Europe/Middle East/Africa, while Asia-Pacific revenues fell seven per cent and revenues from its other emerging markets segment dropped 16 per cent.
IBM’s global technology services unit saw a four-per-cent decline in revenue, while the global business services segment revenues fell three per cent.
Sales from the company’s software segment were flat, while revenues from its key middleware products, including WebSphere, Information Management, Tivoli, Social Workforce Solutions (formerly Lotus) and Rational products, were up one per cent year-over-year. Operating systems sales shed two per cent.
Revenues from the systems and technology segment slumped 17 per cent, while IBM’s global financing unit saw sales increase by two per cent from a year earlier.
Gross profit margin widened to 45.6 per cent from 45.1 per cent in same period of 2012.
Shares of IBM fell 4.71 per cent in premarket trade, to $197.40.