IBM says that its clients have shifted priorities toward saving capital in recent weeks because of COVID-19, hitting software sales, although the company's cloud business conetinues to grow.

“IBM remains focused on helping our clients adapt to the immediate challenges of the COVID-19 pandemic, while we continue to enable them to shift their mission-critical workloads to hybrid cloud and expand their use of AI to help transform their operations," said Arvind Krishna, IBM chief executive officer. "Our first-quarter performance in cloud is a reflection of the trust clients place in IBM's technology and expertise today, and positions us to continue building an enduring hybrid cloud platform for the future.”

IBM’s hybrid cloud offers combined management of on-premises and remote computers for clients.

IBM said that 70% of its revenue is made up by industries that are predicted to be moderately or minimally impacted by the virus outbreak, including healthcare and telecommunications.

Highlights for the first quarter include:

• GAAP EPS from continuing operations of $1.31
• Operating (non-GAAP) EPS of $1.84
• Revenue of $17.6 billion, down 3.4 percent (up 0.1 percent adjusting for divested businesses and currency)
• Cloud & Cognitive Software up 5 percent (up 7 percent adjusting for currency)
  
• Systems up 3 percent (up 4 percent adjusting for currency)
  
• Global Business Services flat (up 1 percent adjusting for currency)
• Total cloud revenue of $5.4 billion, up 19 percent (up 23 percent adjusting for divested businesses and currency)
• Cloud revenue of $22 billion over last 12 months, up 13 percent (up 16 percent adjusting for divested businesses and currency)
• Red Hat revenue, up 18 percent (up 20 percent adjusting for currency), normalized for historical comparability
• GAAP gross profit margin up 90 basis points; Operating (non-GAAP) gross profit margin up 150 basis points
• Net cash from operating activities of $14.5 billion and free cash flow of $11.6 billion, over the last 12 months

IBM is also withdrawing its full-year 2020 guidance in light of the current COVID-19 crisis. The company said it would reassess this position based on the clarity of the macroeconomic recovery at the end of the second quarter.