IBM reported higher first-quarter profit, but revenue was flat.
The company raised its per share earnings forecast for the year. IBM earned $2.61 a share in the quarter, up 13 percent from $2.31 in the first quarter of 2011. Operating earnings were up 15 percent to $2.78 a share from $2.41 a share in the year earlier quarter. Net income for the quarter was up 7 percent to $3.1 billion from $2.9 billion in the 2011 quarter. Operating earnings were $3.3 billion, up 9 percent from $3 billion in the 2011 period. Revenues for the first quarter were flat at $24.7 billion.
“In the first quarter, we drove strong profit and earnings per share growth. We delivered another excellent software performance, expanded services margins, and continued the momentum in our growth initiatives,” said Ginni Rometty, IBM president and CEO. “Our investments in growth market countries continued to generate strong revenue growth across software, hardware and services while contributing to the company”™s ongoing margin expansion. Based on this performance, we are raising our 2012 full-year operating earnings per share expectations to at least $15.”
Revenue in the Americas and in the Asia Pacific region rose, they fell in Europe, the Middle East and Africa, and also in emerging markets. Revenues in Brazil, Russia, India and China were up 10 percent.
Separately, IBM and Toshiba announced that Toshiba will buy IBM”™s Retail Store Solutions business for $850 million. It offers retail point-of-sale systems. Revenue in 2011 for that unit was $1.1 billion with 1,000 employees worldwide.
Gannett earnings decline
Earnings fell at Gannett Co. Inc., the publisher of USA Today as well as The Journal News in White Plains. Per-share profit slipped to 28 cents in the first quarter from 37 cents in the first quarter of last year. Excluding special items in both years, first-quarter earnings were 34 cents a share, down from 41 cents in the 2011 first quarter.
CEO Gracia Martore said first-quarter results “were impacted by spending on strategic investments and advertising softness, particularly during January”™s industry-wide slowdown.”
She said that while advertising improved in February and March, that could not overcome the slow start to the year.
Results for the quarter also include special charges related to facility consolidations and workforce restructuring. The consolidation charges were $4.8 million because of costs associated with the transfer of production activities for the Cincinnati Enquirer to a third-party printer in Columbus, Ohio. The workforce restructuring charges reflect the effects of an early retirement plan offered in the first quarter.
Operating revenues were down, but digital revenues rose because of growth at CareerBuilder. Broadcasting revenues rose because of growth in retransmission revenue. Publishing revenues were down because of the weak advertising market. Soft national advertising demand at USA Today resulted in a 13 percent decline in the national ad category. TV revenues rose because of higher auto spending, Super Bowl advertising and politically related ad demand.
