IBM Corp. blew away second-quarter profit projections and jacked up its full-year earnings forecast Thursday, a rare sign of confidence from a major corporation in the recession.
Even though IBM's sales are slipping, the results demonstrate the technology company's belief that it can continue wringing out more profit from its services and software divisions.
The 2009 profit forecast went to at least $9.70 per share, from $9.20 per share, a target that IBM set in January.
IBM said after the market closed that profit in the latest quarter, which ended June 30, rose 12 percent to $3.1 billion, or $2.32 per share. Analysts expected $2.02 per share.
Meanwhile, sales dropped 13 percent to $23.25 billion, lower than the $23.59 billion predicted by analysts polled by Thomson Reuters. Sales would have been down 7 percent without currency fluctuations.
IBM's results don't mean corporate technology spending has rebounded.
Consulting and outsourcing rival Accenture Ltd. says there are fewer opportunities in higher-end services. Dell Inc. this week said it still is finding it hard to sell PCs to corporations, which are holding on to machines longer than normal. Even chip maker Intel Corp., which this week reported stronger-than-expected earnings and guidance, said large companies haven't loosened their pursestrings yet.
Shares of Armonk, N.Y.-based IBM rose $1.86, 1.7 percent, to $112.50 in extended trading after the earnings report. The stock had closed regular trading at $110.64, up 3.2 percent on the day.