IBM (NYSE: IBM) announced first-quarter 2012 profits of $3.1 billion, spurred by increases in software, services and growth markets.
IBMs first-quarter net income of $3.1 billion when compared with $2.9 billion in the first quarter of 2011 represents an increase of 7 percent. Meanwhile, total revenue for the first quarter of 2012 of $24.7 billion was flat from the first quarter of 2011, the company reported.
In the first quarter, we drove strong profit and earnings per share growth, said Ginni Rometty, IBM president and CEO, in a statement. We delivered another excellent software performance, expanded services margins, and continued the momentum in our growth initiatives. Our investments in growth market countries continued to generate strong revenue growth across software, hardware and services while contributing to the companys ongoing margin expansion. Based on this performance, we are raising our 2012 full-year operating earnings per share expectations to at least $15.00.
Revenue from the companys growth markets increased 9 percent, and 40 countries had double-digit revenue growth. Revenue in the BRIC countriesBrazil, Russia, India and Chinaincreased 10 percent, IBM said. Regarding regions, the Americas first-quarter revenue was $10.5 billion, an increase of 1 percent from the 2011 period. Revenue from Europe/Middle East/Africa was $7.6 billion, down 2 percent, and Asia-Pacific revenue increased 4 percent to $6.1 billion. OEM revenue was $509 million, down 17 percent compared with the 2011 first quarter.
Meanwhile, revenue from IBMs software business was $5.6 billion, an increase of 5 percent compared with the first quarter of 2011. Revenue from IBMs key middleware products, which include WebSphere, Information Management, Tivoli, Lotus and Rational products, was $3.5 billion, an increase of 7 percent versus the first quarter of 2011. And operating systems revenue of $590 million increased 9 percent compared with the prior-year quarter.
For its part, revenue from the WebSphere family of software products increased 16 percent year over year. Information Management software revenue increased 5 percent. Revenue from Tivoli software increased 5 percent. Revenue from Lotus software was flat, and Rational software increased 1 percent, IBM said.
Moreover, revenue from the companys business analytics operations across services, software and hardware segments increased 14 percent.
We continued our strong performance in software, said Mark Loughridge, senior vice president and chief financial officer for Finance and Enterprise Transformation at IBM, in a call with analysts. Software profits were up 12 percent, driven by growth in business analytics, cloud and Smarter Planet businesses, he said.
Loughridge said IBMs growth initiatives of business analytics sales rose 14 percent year over year, cloud-related revenue doubled and Smarter Planet revenue grew more than 25 percent year over year. In addition, growth markets, another of IBMs key growth initiatives, grew 9 percent year over year.
For its services business, IBMs Global Technology Services segment revenue increased 2 percent to $10.0 billion, and the companys Global Business Services segment revenue was down 2 percent to $4.6 billion.
Meanwhile, revenue from the Systems and Technology segment totaled $3.7 billion for the quarter, down 7 percent from the first quarter of 2011. Total systems revenue decreased 6 percent. Revenue from Power Systems was flat compared with the 2011 period. Revenue from System x was also flat. Revenue from System z mainframe server products decreased 25 percent compared with the year-ago period. Total delivery of System z computing power, as measured in MIPS (millions of instructions per second), decreased 5 percent. Revenue from System Storage decreased 4 percent, and revenue from Retail Store Solutions decreased 13 percent year over year. Revenue from Microelectronics OEM decreased 13 percent.
IBM announced plans to sell its Retail Store Solutions business to Toshiba TEC for $850 million.