The company's total group sales for the quarter were $17.7 billion, which was a very modest 1% increase on last year as IBM continued to focus on its newer cloud, AI and software markets - including its acquired Red Hat business.
Big Blue is still preparing to spin off its managed infrastructure services business. Earlier this month, the firm announced that Kyndryl will be the name of the new independent company created, expected to occur by the end of 2021.
The new company will be headquartered in New York City and IBM said its global base will consist of 4,600 customers, with the aim of extending its partner network and ecosystem.
On the business units that will be remaining, Cloud & Cognitive Software sales were up 4%, Systems climbed just above 4% and Global Business Services rose over 2%. Red Hat sales jumped 17%.
The total gross profit for the group increased from $7.9 billion to $8.2 billion annually, and the gross profit margin went up from 45.1% to 46.3%.
Arvind Krishna, IBM chairman and chief executive officer, said: “Strong performance in cloud - driven by increasing client adoption of our hybrid cloud platform - and growth in software and consulting enabled us to get off to a solid start for the year.”
IBM's total net income went down from $1.2 billion to $955 million for the quarter, but it increased its shareholder dividend.
James Kavanaugh, IBM senior vice president and chief financial officer, added: “We increased investments in our hybrid cloud and AI capabilities, while significantly deleveraging in the quarter and supporting our commitment to a secure and growing dividend.”
