International Business Machines Corp IBMdelivered first-quarter 2018 non-GAAP earnings of $2.45 per share, which beat the Zacks Consensus Estimate by a nickel. Earnings per share (EPS) increased 4.3% from the year-ago quarter but plunged 52.7% sequentially.
The year-over-year growth in EPS can be attributed to higher revenues (10 cents contribution), improving gross margin trajectory, pre-tax margin expansion (four cents contribution) and aggressive share buyback (five cents contribution).
This was partially offset by higher tax rate (couple of cents negative impact) and headwinds related to initiatives in repositioning IBM’s business (five cents negative impact).
Revenues of $19.07 billion outpaced the Zacks Consensus Estimate of $18.72 billion and climbed 5.1% on a year-over-year basis. However, revenues declined 15.4% sequentially. At constant currency (cc), revenues remained flat at $18.20 billion.
Shares declined roughly 6% in after-hour trading following the first-quarter announcement. IBM has returned 4.9% year to date, slightly below the industry’s growth of 5.3%.