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IBM's 1Q earnings indicate tech spending picking up; results top expectations
(AP) 04:37:22 PM (ET), Monday, April 19, 2010 (NEW YORK)
IBM Corp.'s first-quarter results show signs that the recovery in corporate technology spending is picking up speed.

IBM said Monday its earnings for the first three months jumped 13 percent to $2.6 billion, or $1.97 per share. In the same period of 2009 it earned $2.3 billion, or $1.70 per share.

The improvement came not just from cost cutting, which IBM relied on much of last year to raise profits. In the most recent quarter, revenue climbed 5 percent to $22.9 billion, a bigger jump than what the company had in the last three months of 2009, when revenue grew just under 1 percent from the year before.

The first-quarter results beat average analyst estimates from Thomson Reuters of $1.93 per share on revenue of $22.8 billion.

IBM said it expects continued revenue growth in the current quarter, even without accounting for weakness in the dollar that boosted the first-quarter numbers. IBM increased its 2010 earnings per share forecast to $11.20. Analysts were expecting $11.12.

"Looking ahead, we are confident in our ability to grow revenue," IBM CEO Samuel Palmisano said in a statement.

The upbeat news could reflect the fact that more businesses are spending again on technology such as computer servers and software after clamping down during the recession. Intel Corp., the world's biggest chip maker, said last week that its first-quarter income nearly quadrupled.

IBM's earnings report came out after IBM shares rose $1.60, 1.2 percent, to close at $132.23. In after-hours trading the stock fell 1.8 percent.


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* IBM continues to grow with a combo of cost cuttings & profits. *

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