IBM is withdrawing its full-year guidance for 2020 due to the current coronavirus pandemic and will reassess its position when there is more economic clarity.

The company’s decision comes after reporting a 3.4% drop in revenue for the first quarter of 2020.

Disruption from COVID-19 is the first real test of Arvind Krishna’s leadership since taking over from Ginni Rometty as CEO. The tech giant reported revenues of $21.8 billion (£16.7 billion) shortly before Rometty announced her retirement. On Monday it reported $17.6 billion (14.2 billion) for the first three months of 2020.

The company said it will reassess this position based on “the clarity of the macroeconomic recovery at the end of the second quarter”.

Despite the drop, other elements of IBM’s business performed well. The firm’s cloud and cognitive software saw a 5% increase, with total cloud revenue up 19% to $5.4 billion (£4.4 billion). Similarly, Red Hat revenue also saw an increase of 18%.

“I believe that what we are going through today, with the shift to remote work, automation … will accelerate our client’s shift to hybrid cloud,” Krishna said on a call with Wall Street analysts Monday. “This gives me immense confidence in our future.”

Since its $43 billion acquisition of Red Hat, and the subsequent shift in focus towards hybrid cloud, IBM has seen continued growth in that particular market.

After five consecutive quarters of declining revenue, the final three months of 2019 saw a 0.1 increase largely based on its cloud success. Total cloud revenue for the final quarter of 2019 hit $6.8 billion (£5.5 billion), a rise of 21%.

In the grand scheme of things, IBM is still far behind the likes of AWS and Microsoft for cloud computing revenues, but it is one of the first to release quarterly performance since the pandemic, which could have a big impact on all the major market players.