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(Reuters) - International Business Machines Corp
With demand for IBM's legacy hardware and software businesses stagnating, Chief Executive Ginni Rometty has been shifting the company towards "strategic imperatives" such as cloud-based services, security software and data analytics.
The growth in these "strategic imperatives", which are spread across the company's five reporting units, continued, with revenue increasing 12 percent in the first quarter. Revenue growth was 11 percent in the fourth quarter.
Revenue from "strategic imperatives" was $7.8 billion in the latest quarter, accounting for 42 percent of total revenue, compared with 37 percent last year.
IBM said gross profit margins fell in all five of its reporting units in the latest quarter, with total company-wide margins dropping to 42.8 percent from 46.5 percent.
The company's net income dropped to $1.75 billion, or $1.85 per share, from $2.01 billion, or $2.09 per share.
Excluding items, IBM earned $2.38 per share, beating analysts' average estimate of $2.35.
The company also said it expects adjusted earnings of at least $13.80 per share for fiscal 2017, reiterating a forecast it gave on Jan. 19.
Since then, the average analyst estimate for earnings per share has risen from $13.74 to $13.78.
Up to Tuesday's close, IBM's shares had risen about 2.5 percent in 2017, less than the roughly 4 percent rise in the Dow Jones Industrial Average <.DJI>.
(Reporting by Narottam Medhora in Bengaluru; Editing by Savio D'Souza)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)