Fueled by services and software growth, IBM on Monday reported that revenue in the first quarter jumped 11.3 percent while income grew 8 percent.
For the quarter ending March 31, the Armonk, N.Y., company earned $1.4 billion on revenue of $20.1 billion, both increases over the first quarter in 2002.
The gains in services and software were offset by a 1.3 percent drop in hardware revenue—to $5.8 billion—particularly in the eServer zSeries mainframe group, which saw about a 16 percent drop. However, John Joyce, senior vice president and chief financial officer, said in a conference call with analysts that much of that drop was the result of customers waiting for the next mainframe release—code-named T Rex—later this quarter.
Revenue for IBMs Global Services group increased 23.6 percent, to more than $10.1 billion—driven in large part by the companys $3.5 billion acquisition last fall of PricewaterhouseCoopers consulting business, Joyce said.
The unit in the first quarter generated 15 deals of more than $100 million, and on that topped $2 billion. IBM also was able to regain 110 of the 149 accounts that dropped PricewaterhouseCoopers before the acquisition.
"Our on-demand value proposition continued to address our customers requirements," Joyce said.
He also said that an acquisition has helped boost IBMs software unit. In February, IBM bought Rational Software Corp. for $2.1 billion, a move Joyce said has added more capabilities to the companys middleware families, such as WebSphere and DB2.