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Quarterly profits at IBM Corp. leaped 26 percent and blew past analysts' forecasts Wednesday, with U.S. operations showing surprising strength given the faltering economy. The technology company also increased its earnings forecast for the year.

In the first quarter, Armonk, N.Y.-based IBM earned $2.32 billion, or $1.65 per share, well ahead of its profit of $1.84 billion, or $1.21 per share, in the same period of 2007.

Revenue rose 11 percent to $24.5 billion, better than the $23.7 billion expected by analysts surveyed by Thomson Financial. The consensus earnings forecast had been $1.45 per share.

IBM's sales numbers were boosted by ongoing weakness in the dollar, since deals done in other currencies now translate into more greenbacks. IBM said its revenue would have risen just 4 percent if not for currency fluctuations.

Even so, this marked the second straight quarter that IBM showed relative immunity to broader economic troubles, especially those in the financial services sector, its largest customer segment.

IBM's chief financial officer, Mark Loughridge, said the performance reflected the company's balance between international and U.S. revenue, and the fact that IBM gets about half its money through contracts with recurring, annuity-like revenue streams. That makes IBM less vulnerable to downward cycles than companies that rely more heavily on selling stuff in individual transactions, which often get postponed when times turn rough.

Reflecting his confidence in that model, Loughridge now expects IBM to earn at least $8.50 per share in 2008. Analysts had been expecting $8.25 per share.

"We just had ... a very powerful quarter here, and I think we have some very optimistic signs," Loughridge told analysts on a conference call.

IBM shares rose $3.30, 2.8 percent, to close at $120.47 before Wednesday's earnings report. The stock surpassed $124 in extended trading, its highest mark since 2002.

One particular bright spot was IBM's improved performance in its home market, which generates 35 percent of its revenue. U.S. sales increased 6 percent.

All of IBM's business units showed increased levels of profitability.

However, the services division's contract signings dropped 2 percent to $10.8 billion. That is a closely watched measure of future revenue. Services revenue actually booked in the quarter rose 17 percent to $14.6 billion.

Software revenue was up 14 percent to $4.8 billion, bolstered by several acquisitions.

Hardware revenue fell 7 percent to $4.2 billion, though the decline would have been 2 percent if not for IBM's 2007 sale of its printing division. The hardware numbers were helped by the launch of a new line of mainframe computers but hurt by weakness in lower-priced server lines.
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CPUMotherboardGraphicsRAM
i7 5820K MSI X99A SLI PLUS EVGA GTX 1070 FTW 4x8GB G.Skill Ripjaws  
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Samsung 850 Pro Samsung 850 Evo Noctua NH-D15 Windows 10 
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i7 930 @ 3.7 HT Gigabyte X58A-UD3R VisionTek 4870x2 3x4GB's G.Skill Ripjaws 1600 
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500GB AAKS, 2x 640GB AAKS, 2x 1TB Samsung SH-S203B Windows 7 Ultimate 64-bit Samsung 245BW 
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Happy Hacking Keyboard 2 Silverstone OP850 Antec 1200 [Three Nanoxia FX12] [Two San Ace 1011] Logitech G500 
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Rig
(15 items)
 
   
CPUMotherboardGraphicsRAM
i7 5820K MSI X99A SLI PLUS EVGA GTX 1070 FTW 4x8GB G.Skill Ripjaws  
Hard DriveHard DriveCoolingOS
Samsung 850 Pro Samsung 850 Evo Noctua NH-D15 Windows 10 
MonitorKeyboardPowerCase
Dell U2515H Happy Hacking Keyboard 2  EVGA Supernova 750 G2 Corsair 600Q 
MouseMouse PadAudio
Logitech G403 Steelseries QcK Mass M-Audio AV40 
CPUMotherboardGraphicsRAM
i7 930 @ 3.7 HT Gigabyte X58A-UD3R VisionTek 4870x2 3x4GB's G.Skill Ripjaws 1600 
Hard DriveOptical DriveOSMonitor
500GB AAKS, 2x 640GB AAKS, 2x 1TB Samsung SH-S203B Windows 7 Ultimate 64-bit Samsung 245BW 
KeyboardPowerCaseMouse
Happy Hacking Keyboard 2 Silverstone OP850 Antec 1200 [Three Nanoxia FX12] [Two San Ace 1011] Logitech G500 
Mouse Pad
Razer eXactMat 
CPUGraphicsRAMHard Drive
i7 3615QM GT 650M 16GB DDR3 256GB SSD 
OS
OS X Mountain Lion 
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Reply