IBM profit up 13% at $2.6 billion

Computer services provider IBM has reported 13 per cent growth in net income at $2.6 billion in the first three months of 2010 on account of increased technology spending by corporates.

Total revenues stood at $22.9 billion in the first quarter of 2010, an increase of 5 per cent over the same period last fiscal, IBM said.

"In the first quarter, we drove significantly improved revenue growth rates from the fourth quarter across our businesses and geographies.

"We had strong results in strategic investment areas, including growth markets, business analytics and smarter planet solutions," IBM chairman, president and CEO Samuel J Palmisano said.

Revenues from IBM's software sector increased 11 per cent to $5 billion.

In addition, the company's system and technology revenue rose by 5 per cent to $3.4 billion.

In terms of geographical perspective, the Asia-Pacific region has witnessed highest revenue growth at 10 per cent from the year-ago period to $5.3 billion in the first quarter of 2010, while revenues from Europe/West Asia/Africa increased five per cent to $7.6 billion.

Further, the company's revenue from Americas stood at $9.5 billion in the January-March quarter of 2010, an increase of 2 per cent.

IBM raised its outlook for the rest of the year, projecting 2010 earnings at $11.2 a share, up from $11 per share in its earlier forecast.

"Looking ahead, we are confident in our ability to grow revenue, and given our mix of higher-value business and productivity we will expand margins, grow profit, cash and EPS, and increase returns to shareholders.

"Thus, we expect full-year 2010 diluted earnings per share of at least $11.20," Palmisano added.

Besides, IBM said it expects constant currency-revenue growth for the company and for its total services- software and hardware businesses in the second quarter.

The technology giant's balance sheet remained strong with $14 billion of cash on hand. It generated free cash of $1.4 billion at the end of the first quarter of 2010.