On April 19, 2011, IBM announced first-quarter 2011 earnings of $2.31 per share (compared to earnings of $1.97 per share in the first quarter of 2010), an increase of 17%. First-quarter net income was $2.9 billion, compared to $2.6 billion in the first quarter of 2010, an increase of 10%.

Required:
Examine IBM’s 8-K (issued on April 19, 2011) announcing earnings for the first quarter of 2011 (www.ibm.com/investor).
1. Compute the growth in total revenues and the gross margin percentage from the first quarter of 2010 to the first quarter of 2011. Evaluate these numbers.
2. List the geographical areas where IBM generates revenues. Speculate as to the reasons for the relative performance of these geographical areas.
3. List IBM’s five reportable segments. Evaluate the operating performance of each segment, and comment on the underlying factors affecting the relative performance of each.