IBM cites strong earnings for quarter

— -- IBM reported revenue of $28.9 billion, topping Wall Street estimates of $27.8 billion. Big Blue was the first major tech company to release earnings for the quarter.

The revenue increase was a jump of 10% from a year ago, although IBM said currency fluctuations accounted for about 6 percentage points of the gain. Earnings per share of $2.80 rose from $2.26 the previous year.

IBM provided few other details. The company plans to release more information Thursday, when its results were originally scheduled to come out. But it was enough to comfort many analysts who have been watching for signs of a downturn in tech spending.

"There are worries about the credit market … (and whether) we are at the beginning of what could be a larger recession," says tech analyst Charles King at researcher Pund-IT. "IBM's earnings should be seen as good news."

IBM shares rose 5% to close at $102.93 Monday, giving the company a market value of nearly $142 billion.

But that doesn't mean investors should expect equally impressive numbers from other tech firms as the corporate earnings season kicks off. IBM is unique because it's so big, and does so much of its business outside the USA, says tech analyst Eugene Zakharov at Technology Business Research.

The weak dollar helped IBM by making its products and consulting services less expensive in other countries, Zakharov says. And IBM got a boost from a strong presence in emerging nations. IBM has nearly 100,000 of its 356,000 employees in Brazil, Russia, India and China.

Growth in the quarter was "led by strong operational performance in Asia, Europe and emerging countries," IBM CEO Sam Palmisano said in a statement.

Also boosting earnings: IBM's decision to shed low-margin hardware businesses, such as PCs and disc drives. "It really paid off," as IBM can now focus on lucrative consulting deals, Zakharov says.