-- International Business Machines (IBM) shares fell early Thursday as the technology giant maintained its full-year revenue growth outlook and reported first-quarter results above Wall Street's estimates.
The computer and software firm continues to anticipate revenue to rise by more than 5% in constant currency terms for 2026, it said late Wednesday. Foreign exchange is now set to be about a half-point to one-point tailwind to revenue growth this year, compared with previous projections for a half-point boost.
"Given where we are in the year, we believe it is prudent to maintain our guidance, even as the underlying performance and execution are off to an encouraging start," Chief Financial Officer James Kavanaugh said during an earnings call, according to a FactSet transcript.
The stock dropped 7.3% in the most recent premarket activity, extending its year-to-date decline to 15%.
IBM expects revenue in its software business to rise by more than 10% in 2026, while consulting is pegged to accelerate by low- to mid-single-digits, according to Kavanaugh. Infrastructure revenue is still forecast to be down by a low single digit for the year, the CFO added.
For the March quarter, IBM's adjusted earnings advanced to $1.91 per share from $1.60 the year before, topping the FactSet-polled consensus of $1.81. Revenue climbed 9% to $15.92 billion, exceeding the Street's view for $15.63 billion.
"The first quarter was a strong start to the year with broad-based revenue growth across our segments," Chief Executive Arvind Krishna said in a statement. "As clients scale use cases, (artificial intelligence) continues to be a tailwind for our global business."
Revenue for the software segment advanced 11% to $7.05 billion, including a 13% gain in the hybrid cloud business. Consulting revenue inclined 4% to $5.27 billion while sales in the infrastructure business climbed 15% to $3.33 billion.
For the ongoing three-month period, IBM expects constant currency revenue growth to be similar to the full year, Kavanaugh told analysts.