INTERNATIONAL Business Machines Corp shares rose 2.3 percent in late trading on Wednesday after saying 2008 profit will top its previous projections, signaling the computer-services company will resist the United States economic slowdown.
Full-year profit will climb to at least US$8.50 a share, IBM said on Wednesday, higher than a February prediction of US$8.25. Analysts on average projected earnings of US$8.26, in a Bloomberg News survey.
IBM followed Intel Corp in forecasting results that exceeded projections, defying Goldman Sachs Group Inc's prediction this week that US companies would cut earnings targets after an "awful" start. IBM's overseas sales, which account for almost two-thirds of total revenue, helped CEO Samuel Palmisano buck the trend in the first quarter.
"People like the big brands better in a troubling period, and this is a troubling period," Enderle Group President Rob Enderle said on Wednesday in an interview with Bloomberg Radio. Enderle, based in San Jose, California, called the company's first-quarter profit of US$1.65 a share "stunning."
IBM climbed to the equivalent of US$123.28 at 10:18am in German trading yesterday, from the close of US$120.47 on the New York Stock Exchange on Wednesday. Before yesterday, the stock had risen 25 percent in the past year.
The declining US dollar helped boost the value of sales from overseas. The currency fell 7.6 percent against the euro during the quarter. Adjusting for that, revenue from Europe, Africa and the Middle East rose 4 percent, while the Asia-Pacific region posted a 3-percent increase.
However, Palmisano said on Wednesday that the underlying business, rather than favorable currency rates, would lead to the company making its annual profit goal.