IBM Corp. said Monday its first-quarter profit jumped 13 percent, and the company offered evidence that corporate technology spending is rebounding after the recession.
IBM said it earned $2.6 billion, or $1.97 per share, in the first three months of the year. In the same period of 2009 it earned $2.3 billion, or $1.70 per share.
The improvement came not just from cost cutting, which IBM relied on much of last year to raise profits. In the most recent quarter, revenue climbed 5 percent to $22.9 billion.
The results beat the average analyst estimate of $1.93 per share on revenue of $22.8 billion, according to Thomson Reuters.
Even before Monday, there were signs that more businesses are spending again on technology such as computer servers and software after clamping down during the recession. Last week Intel Corp., the world’s biggest chip maker, said its first-quarter income nearly quadrupled. And analysts at Gartner Inc. said worldwide information-technology spending is expected to rise more than 5 percent in 2010, after falling 1 percent in 2009.
IBM’s results reaffirm that the pickup in IT spending is significant and broad-based, said Annex Research analyst Bob Djurdjevic.
“I expected good things from IBM but I didn’t expect them to be this good,” he said.
On a conference call with analysts Monday, IBM’s chief financial officer, Mark Loughridge, declined to give an opinion on whether the broader market for information technology has returned to normal. But of IBM in particular, he said, “I feel like we’ve got a good hand going into the second quarter.”
IBM said its first-quarter revenue would have been flat at constant currency rates. Deals in other currencies translate into more dollars when the U.S. currency is weak.
However, IBM had a bigger increase than what it showed in the last three months of 2009. In that quarter, revenue grew just…