IBM reported better-than-expected earnings and income for the primary quarter on Wednesday.

Here is how the corporate carried out:

• Earnings per share: $1.60 adjusted vs. $1.40 anticipated
• Income: $14.54 billion vs. $14.4 billion anticipated

Income elevated 0.6% within the quarter from $14.5 billion a 12 months earlier, in line with a assertion. Internet revenue slid to $1.06 billion, or $1.12 per share, from $1.61 billion, or $1.72 per share, in the identical quarter a 12 months in the past. The corporate accelerated productiveness efforts, Jim Kavanaugh, its finance chief, mentioned on a convention name with analysts.

For 2025, IBM reiterated its expectation for $13.5 billion in free money stream and at the very least 5% income development at fixed foreign money. At present alternate charges, foreign money will present 150 foundation factors of profit for 2025 development, down from the corporate’s forecast of 200 foundation factors in January.

Administration known as for $16.4 billion to $16.75 billion in second-quarter income. The center of the vary, $16.58 billion, is forward of the LSEG consensus of $16.33 billion. IBM has turn out to be extra cautious concerning the contribution of consulting, Kavanaugh mentioned on the convention name.

“Whereas sentiment and the working setting have been quickly shifting, our efficiency displays the continued success of our targeted technique round hybrid cloud and AI, particularly the place shoppers are on the lookout for price financial savings, productiveness features and trusted companions to assist them transfer quick and scale,” IBM CEO Arvind Krishna mentioned on the decision.

“These wants stay entrance and middle in immediately’s market. Earlier than going deeper into our outcomes, let me begin by saying that we recognize the administration’s concentrate on financial development and rational regulation, which can strengthen the US aggressive place. We consider this can lead to long-term worth creation and make it simpler for know-how to contribute to financial development.”

Within the first quarter, software program income rose 7% to $6.34 billion, consistent with the consensus amongst analysts polled by StreetAccount. The hybrid cloud software program class that features Pink Hat grew 12%, in contrast with 16% within the fourth quarter.

IBM’s consulting unit contributed $5.07 billion in income, which was down 2% and barely above StreetAccount’s $5.05 billion consensus.

The corporate’s infrastructure division, which incorporates mainframe computer systems, posted a 6% decline in income to $2.89 billion, larger than the $2.76 billion consensus. Earlier this month, IBM launched its z17 mainframe. Infrastructure income development usually picks up as clients undertake the following technology after which drifts down late within the cycle.

Through the first quarter, IBM mentioned it had settled its lawsuits with chip producer GlobalFoundries. IBM additionally closed its $6.4 billion acquisition of cloud software program maker HashiCorp and introduced plans to purchase knowledge storage software program startup DataStax for undisclosed phrases.

IBM has been an outperformer this 12 months because the broader market has offered off due largely to considerations round President Donald Trump’s tariffs and their potential impression on the financial system. As of Wednesday’s shut, IBM shares had been up 11%, whereas the Nasdaq was down nearly 14%.

The inventory slipped 6% in prolonged buying and selling.

“Within the close to time period, uncertainty might trigger shoppers to pause and take a wait-and-see strategy,” Krishna mentioned, including that purchasing conduct has not meaningfully modified up to now within the second quarter.

Nobody is immune from fallout from President Trump’s tariffs on imported items, Kavanaugh mentioned in an interview with CNBC’s Jon Fortt. Beneath 5% of IBM’s spending comes from items imported to the U.S, he mentioned on the decision.

IBM’s clients are prioritizing environment friendly spending and the preservation of money, Kavanaugh informed the Wall Road Journal. The U.S. Division of Governmental Effectivity had delayed or nixed 15 federal contracts, he informed Bloomberg.

Signings would have been larger within the first quarter if not for shoppers hesitating earlier than making shopping for selections, Kavanaugh mentioned on the convention name.

“There are areas of our portfolio that might see larger variability within the occasion that the macroeconomic setting deteriorates,” he mentioned. “This contains consulting, which is extra delicate to discretionary pullbacks and DOGE-related initiatives, consumption-based providers and software program, together with in Pink Hat, and areas of distributed infrastructure.”

That is breaking information. Please test again for updates.

WATCH: Uncertainty is the market is ‘short-term’, says IBM CEO Krishna