IBM reported higher-than-expected quarterly earnings today despite a weakening US economy, helped by strong revenue from technology services and consulting, sending its shares higher.
First-quarter net income rose 26 per cent to $2.32 billion, or $1.65 per share, from $1.84 billion, or $1.21 per share, a year earlier. Revenue grew 11 per cent to $24.5 billion from $22 billion. Currency gains contributed seven percentage points to revenue growth.
Analysts, on average, expected profit of $1.45 per share and revenue of $23.7 billion, according to Reuters Estimates.
IBM, the world's largest technology-services company, said in February that strong fourth-quarter growth in services contracts lasting a year or less was paying off. IBM said those benefits gave it more confidence in its US business, even as othertechnology companies were seeing weaker spending amid concern over the US economy.
IBM shares, seen as a safe haven by many investors, have added almost 10 percent this year compared with the Dow Jones Industrial index's 6.8 per cent decline and the Nasdaq Composite Index's 14 per cent drop through Tuesday.
IBM trades at about 14 times expected 2008 earnings per share compared with about 13 for competitor Hewlett-Packard Co.