IBM Soars on Q1 Results

Analysts at Goldman Sachs reportedly upgraded IBM (NYSE: IBM) shares to the firm's recommended list from outperform after the report.

Net income for the quarter ended March 31st rose to $1.75 billion, or 98 cents per share, from $1.52 billion, or 83 cents, in the same period last year. Revenue rose 9 percent to $21 billion.

Company officials reportedly told investors on a conference call that they expect to meet previous targets for full-year results.

"The momentum we saw building in the latter part of 2000 continued in the first quarter of 2001," said chairman and chief executive officer Louis V. Gerstner, Jr. in announcing the results.

"Times like these play to our strengths as a diversified, services-led company," said Gerstner. While many computer companies "have gotten a bit carried away over the last few years by the exaggerated expectations for the Internet world," he said, IBM has "remained totally focused" on services and technological advancements.

Gerstner acknowledged that "not all the news was good" during the quarter.

"The desktop segment is hurting," he said, "and it is not just a cyclical issue. This is a mature business, and it no longer drives the economics of the IT industry."

The company's hard disk drive and display businesses "were also weak," Gerstner said.

Revenue from the Americas rose 6 percent, sales from Europe, the Mideast and Africa advanced 3 percent, and Asia-Pacific revenue grew 8 percent, IBM said.