Increased profits at IBM indicate spending rise

Associated Press / April 20, 2010

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NEW YORK — IBM Corp. said yesterday its first-quarter profit jumped 13 percent, and the technology company offered evidence that the recovery in corporate technology spending is picking up speed.

IBM said it earned $2.6 billion, or $1.97 per share, in the first three months of the year. In the same period of 2009 it earned $2.3 billion, or $1.70 per share.

The improvement came not just from cost cutting, which IBM relied on much of last year to raise profits. In the most recent quarter, revenue climbed 5 percent to $22.9 billion, a bigger jump than what the company had in the last three months of 2009, when revenue grew just under 1 percent from the year before.

The first-quarter results beat average analyst estimates from Thomson Reuters of $1.93 per share on revenue of $22.8 billion.

IBM increased its 2010 earnings per share forecast to $11.20. Analysts were expecting $11.12.

The upbeat news could reflect the fact that more businesses are spending again on technology such as computer servers and software after clamping down during the recession.