IBM (IBM) has a standout quarter which would be a surprise except that it happens so often.

The firm reported first quarter 2009 EPS of $1.70 per share compared with EPS of $1.64 per share in the first quarter of 2008, an increase of 4%. Net income was $2.30 billion compared with $2.32 billion in the first quarter of 2008.  Revenue was $21.7 billion, down 11% percent (4%, adjusting for currency) from the first quarter of 2008.

The market looked at the revenue as being a little light compared with estimates and pushed the stock down about $3 to $97, but under current economic circumstances, the figures should be viewed as a blessing.

If the revenue from the firm’s systems and technology segment had not fallen almost 24% to $3.2 billion, the quarter would have been brilliant. Sales from servers, mainframes, and storage got clobbered.

One a better note, IBM’s huge technology services business had a 9% revenue drop to $8.6 billion, but margins increased from 31.3% to 33.9%. Global business service revenue fell 11% to $4.4 billion, but it also had a margin improvement, a testament to cost controls.

IBM’s software operation lost 6% of its revenue, falling to $4.5 billion, but like the other division margins were up.

The company once again confirmed that it expects full-year 2009 earnings of at least $9.20 per share.

The stock may be in for a little dip, but compared with what is being expected for tech earnings this quarter, IBM put an anchor into the sea of tranquility.

Douglas A. McIntyre

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