International Business Machines (IBM), the world's largest computer company, Thursday posted quarterly profit and revenue that fell far short of Wall Street's expectations as it blamed difficulties in closing key deals.

In a surprise statement, the Armonk, N.Y.-based company reported a profit from continuing operations of $1.41 billion, or 85 cents a share, in the first quarter compared with $1.36 billion, or 79 cents a share, a year earlier.

Analysts were looking for a profit, including options expense, of 90 cents a share, according to Reuters Estimates.

Revenues from continuing operations rose a tens in the final weeks of the quarter," Chairman and Chief Executive Sam Palmisano (search) said in the statement. He said the shortfall was tied to countries with "soft economic conditions" and short-term signings in the company's Global Services business, which accounts for nearly half of all IBM revenue.