FILE PHOTO: A man stands near an IBM logo at the Mobile World Congress in Barcelona, Spain, February 25, 2019. REUTERS/Sergio Perez

(Reuters) – International Business Machines Corp (IBM.N) posted quarterly revenue slightly lower than Wall Street expected, but beat profit targets as sales in its high-margin cloud computing business rose 19%.

The company also withdrew its 2020 annual forecast, in line with some other big corporations, as the coronavirus pandemic wreaks havoc on the global economy.

Big Blue is the first U.S. tech major to report quarterly results for the period ending March 31, during which the country’s economy was badly hit as the outbreak kept people indoors.

The company for several years has been focused on becoming a major player in the cloud services industry, acquiring Linux maker Red Hat and selling some legacy businesses.

Revenue from the cloud business, previously headed by IBM’s new boss Arvind Krishna, rose 19% to $5.4 billion in the first quarter.

Krishna took over the chief executive officer role from Ginni Rometty in April, while appointing former Bank of America Corp’s (BAC.N) top technology executive Howard Boville as the new head of IBM’s cloud business.

IBM’s total revenue fell 3.4% to $17.57 billion in the reported quarter, slightly below analysts’ estimates of $17.62 billion, according to IBES data from Refinitiv. Excluding the impact from currency and business divestitures, the company recorded a marginal growth in revenue.

Net income fell to $1.18 billion, or $1.31 per share, in the quarter ended March 31, from $1.59 billion, or $1.78 per share, a year earlier.

On an adjusted basis, the company earned $1.84 per share, above estimates of $1.80 per share.

Reporting by Munsif Vengattil in Bengaluru; Editing by Shounak Dasgupta

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