IBM’s results exceeded expectations last night, raising hopes that global companies are becoming confident enough to spend more on technology.
IBM shares rose 2.4 per cent after-hours to $154.34 after the company reported net income for the fourth quarter of $5.3bn (£3.3bn), or $4.18 per share, compared with $4.8bn, or $3.59 per share, a year earlier.
Analysts on average expected earnings per share of $4.08, according to consensus forecasts.
The company yesterday forecast that 2011 earnings per share would rise further still to “at least $12.56”, up from $11.52 in 2010.
The results show that IBM managed to reverse a decline in signings of services contracts, including bookings for outsourcing and other IT projects.
It signed services contracts worth $22.1bn during the quarter, up 18 per cent.
Revenue rose to $29bn from $27.2bn, higher than the market’s forecast for $28.3bn.
Weak signings had been seen as the company’s weak point in recent quarters, and a signal that many corporate clients were wary of multiyear technology investments.