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IBM said its third-quarter net profit rose 12 percent over a year ago to $3.6 billion while revenue
increased three percent to $24.3 billion , better than the 24.1 billion dollars forecast by analysts.
Earnings per share of $2.82 beat the $2.75 per share expected by analysts.
"We grew revenue in our hardware, software and services businesses, expanded margins and again increased earnings per share at double digits," IBM chairman, president and chief executive Samuel Palmisano said in a statement.
"We achieved excellent performance in our growth markets unit, reflecting sustained investments through the downturn and the continued strength of the infrastructure build-out in these countries," he said.
"Looking ahead, we are uniquely positioned in the enterprise, investing in high value segments like business analytics, advanced systems and smarter planet solutions," Palmisano said.
IBM said revenue fell six percent in Africa, Europe and the Middle East during the quarter and increased three percent in North and South America.
Asia-Pacific revenue was up 14 per cent while revenue grew by 29 per cent over a year ago in Brazil, China, India and Russia.
In a conference call with analysts, chief financial officer Mark Loughridge said IBM ended the quarter with cash on hand of more than $11 billion and plans to "use our strong cash position to invest in future growth."
"I do think we'll see an increase in our software business to cap a strong year," he said.
Profit-taking sent IBM shares down 3.84 per cent to $137.35 in after-hours electronic trading after they hit a record $143.03 during the day's trading on Wall Street.