IBM shares surge as profit rises 4%

IBM’s fourth-quarter earnings handily beat Wall Street’s expectations last night, helped by higher revenue from the technology icon’s lucrative software and services segments.

The results and a stronger-than-expected earnings outlook for the year sent IBM’s stock more than 3% higher after hours.

It was a welcome sign of stability amid the global economic turmoil that’s prompting worries about a slowdown in technology spending among businesses and government agencies.

IBM, which employs more than 3,000 people at eight sites in Ireland, including a substantial operation at the Airport Business Park in Cork, earned $5.49 billion (€4.2bn), or $4.62 per share, in the three months that ended December 31.

That was up 4% from $5.26bn, or $4.25 per share, a year earlier. Adjusted earnings were $4.71 per share, handily surpassing analysts’ expectations, though revenue fell short.

IBM said its revenue grew 2% to $29.49bn from $29.02bn.

Analysts polled by FactSet had expected adjusted earnings of $4.61 per share and revenue of $29.7bn.

For the full year, IBM is forecasting adjusted earnings of at least $14.85 per share, well above the $13.36 per share that analysts are expecting.

New chief executive Ginni Rometty said IBM is “well on track” toward its long-term goal of hitting at least $20 per share in adjusted earnings in 2015 — a rare example of a long-term earnings target disclosed publicly by a such a large company.

The company’s stock rose $6.20, or 3.4%, to $186.72 in after-hours trading. The stock had closed down 55 cents at $180.52.

The company has expanded in Ireland in recent months. In December, it acquired specialist Irish technology firm Cúram Software for an undisclosed sum, believed to be in excess of €100 million.

Management of IBM’s Ireland division has said the company is looking to grow in the country.