Executive Summary

• IBM reported 1Q19 revenues of $18.18 billion, down 4.7% year over year and missing the $18.47 billion consensus estimate. Adjusted EPS was $2.25, down from $2.45 billion the year-ago quarter and beating consensus by three cents.
• The revenue decline was driven by an 11.5% decrease in the systems segment and a 7.4% decrease in the technology services and cloud services segment. Revenues the cognitive solutions segment declined slightly and global business services revenue was flat.
• The company guided for 2019 adjusted EPS of $13.90, in line with the consensus estimate.
• The Red Hat acquisition is expected to close in the second half of the year.