International Business Machines (NYSE: IBM) released its much-anticipated earnings report this afternoon, and profits were better than most analysts expected.

Earnings were up to $2.78 a share from $2.41 in the first quarter of 2011, and higher than the $2.65 per share analysts had pegged for the world’s largest computer-services provider. The company also upped its 2012 operating earnings forecasts from $14.85 a share to an even $15 a share.

However, IBM’s sales of $24.7 billion were virtually flat compared to the same quarter a year ago. That perhaps explains why the tech stock has fallen 2.4% in after-hours trading despite the overall earnings beat.

Today was the first earnings announcement IBM has held under new CEO Virginia “Ginni” Rometty, who took over from Sam Palmisano in January. Part of the company’s new strategy under Rometty is to transition more from hardware sales to the more profitable software sales. Hardware currently comprises more than half of IBM’s business.

IBM’s stock is up 13% in 2012, trading close to its 52-week high when the market closed today. But it appears that today’s earnings aren’t “wowing” after-hours traders despite being better than anticipated. 

Published by Wyatt Investment Research at