IBM beat analyst expectations for the first quarter and the company pointed to its global reach in helping to drive growth despite a challenging market.

First quarter revenue was US$24.5 billion, up 11 percent compared to the same quarter last year. Analysts expected quarterly revenue of $23.7 billion, based on a consensus collected by Thomson Financial.

Diluted earnings per share were $1.65, up 36 percent from $1.21 in the first quarter last year. That compares to Thomson's consensus expectation of $1.45.

In the Americas, IBM reported first quarter revenue of $9.9 billion up 8 percent from the same period in 2007. Revenue from Europe, Middle East and Africa reached $8.8 billion, an increase of 16 percent over the corresponding quarter last year. Asia Pacific revenue also grew significantly, up 14 percent to $5.1 billion.

There were a couple of sore spots, including OEM (original equipment manufacturer) revenue, which was down 16 percent to $696 million.

IBM also saw revenue decline in its Systems and Technology segment. Revenue for the group was down 7 percent compared to last year, but that decrease drops to 2 percent when excluding the impact of the divestiture of its printing division in June of last year.

In the fourth quarter, IBM saw System z revenue fall by 15 percent but at the time said that it expected increases after the introduction of the z10 enterprise class server early this year. That happened, with a revenue increase of 10 percent from System z server products compared to the first quarter last year, IBM said.

Revenue from the software segment was up 14 percent, reaching $4.8 billion. Middleware products, including WebSphere, Information Management, Tivoli, Lotus and Rational produced $3.8 billion, up 16 percent.

Global Business Services products $4.9 billion, up 17 percent compared to the first quarter in 2007.

(More to follow.)