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IBM Q1 Profit Tops Street, Revenues Miss; Withdraws Outlook Due To COVID-19

International Business Machines Corp. (IBM) Monday reported a profit for the first quarter that trumped analysts estimates, however, revenues fell short of expectations. Moving ahead, the company withdrew its full-year 2020 outlook due to ongoing COVID-19 crisis.

Armonk, New York-based IBM reported first-quarter profit of $1.18 billion or $1.31 per share, compared to $1.59 billion or $1.78 per share last year.

Excluding items, IBM's adjusted earnings were $1.65 billion or $1.84 per share for the period. Analysts polled by Thomson Reuters expected earnings of $1.79 per share. Analysts' estimates typically exclude special items.

IBM's first-quarter revenues fell 3.4% to $17.57 billion from $18.18 billion last year. Analysts polled by Thomson Reuters expected revenues of $17.62 billion for the quarter.

IBM is divesting off its low-margin and unprofitable hardware businesses to improve profitability. The company is now striving hard to make IBM a company that provides cloud computing and data analytics.

"IBM remains focused on helping our clients adapt to the immediate challenges of the COVID-19 pandemic, while we continue to enable them to shift their mission-critical workloads to hybrid cloud and expand their use of AI to help transform their operations," said CEO Arvind Krishna, IBM chief executive officer.

Looking forward, IBM said it is withdrawing its full-year 2020 guidance in light of the current COVID-19 crisis. Previously, the company had issued an adjusted earnings outlook of about $13.35 per share.

IBM closed Monday's trading at $120.41, up $0.29 or 0.24%, on the NYSE. The stock, however, dropped $1.71 or 1.42%, in the after-hours trade.

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