SAN FRANCISCO – International Business Machines Corp. (IBM) Tuesday posted a quarterly net profit that beat Wall Street's recently raised profit target as solid year-end product sales were buoyed by a weaker U.S. dollar.
IBM shares rose on the news, as investors said the results were resoundingly strong.
"The earnings per share numbers were great. They even beat the highest 'whisper' number. It looks like earnings were solid from top to bottom," said Steve Neimeth, a portfolio manager for AIG SunAmerica who owns more than 100,000 IBM shares. "As a bellwether for the industry, other technology stocks should rally on these earnings."
IBM reported net income of $3.1 billon, or $1.81 a share, in the fourth quarter, compared with $2.71 billion, or $1.56 a share, a year earlier.
Revenue from continuing operations in the quarter was $27.7 billion, up from $25.9 billion a year earlier.
Analysts on average were looking for the world's largest computer company, based in Armonk, N.Y., to report earnings around $1.76 a share on revenue of $27.5 billion, according to Reuters Estimates.
Wall Street's profit forecasts, which ranged between $1.74 and $1.78 a share, had inched up in recent weeks as analysts boosted their numbers to reflect the positive effect on earnings of translating overseas sales into U.S. dollars.
"IBM delivered a powerful fourth quarter, reflecting the strength of our integrated business model," IBM Chairman and Chief Executive Sam Palmisano (search) said of the company's mix of computers, software and technical services businesses.
Shares of IBM rose about 1 percent to $95.80 in after-hours trade on the Inet electronic brokerage from a $94.90 New York Stock Exchange (search) close.