Shares of IBM Corp. spiked Monday morning after the computer server and software maker said preliminary results show international sales growth, buoyed by the weaker dollar, helped push fourth-quarter earnings from continued operations up 24 percent to widely beat Wall Street's predictions.
The stock added $6.43, or 6.5 percent, to $104.10 after the opening bell.
Before the bell, the company posted quarterly profit from continuing operations of $2.80 per share on sales of $28.9 billion. Analysts polled by Thomson Financial had expected earnings of $2.60 per share on sales of $27.82 billion, according to a Thomson Financial poll.
JPMorgan analyst Bill Shope called the news a "powerful data point" for the Armonk, N.Y. -based company, especially considering its exposure to the beleaguered financial sector. He currently holds a "Neutral" rating on IBM.
The preliminary report also should also help competitor Hewlett-Packard Co., he said, noting that HP remains his "top pick" in the sector.
Shope said, however, that he will wait until final results are released Thursday before making any changes to his outlook model. He expects IBM will report weakness in its hardware unit and little strength in the software unit.
"The devil is often in the details with IBM's results, so it will be critical to receive full segment details, services signings, and the near-term outlook when the company reports results," Shope said in a client note.