IBM profits up on computer sales

19 July 2011 Last updated at 05:53 GMT

IBM is the world's biggest maker of mainframe computers International Business Machines (IBM) reported second quarter net income up 8% on the same quarter last year.

The rise was fuelled by strong growth in sales of both its computers and software.

IBM, the world's biggest maker of mainframe computers, made $3.66bn (£2.27bn), compared with $3.39 billion a year earlier.

IBM raised its prediction for full-year earnings for the second quarter running.

Revenue at the 100-year-old company was 12% higher at $26.7bn.

IBM said strong growth was coming from new signings for its services division, which were up by 16% in the quarter - a sign businesses are still spending on technology.

Although the figures beat expectations, IBM's shares initially fell slightly on the results before rising by 2% in after hours trading.

Kim Caughey Forrest, senior analyst at Fort Pitt Capital Group, said: "The margins were very strong and the revenue, especially in the second quarter when you expect softer revenue, makes it look like they did well in the quarter."

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