First-quarter earnings at International Business Machines rose 8% and matched Wall Street expectations, as a boost from software acquisitions helped overcome only moderate growth overall.
In the first three months of this year, traditionally IBM's slowest quarter, the Armonk, N.Y.-based company earned $1.84 billion, $1.21 a share. In the comparable period last year IBM showed profits of $1.71 billion, or $1.08 per share.
Analysts surveyed by Thomson Financial were expecting $1.21 a share for the first quarter.
IBM's revenue rose 7% to $22.0 billion, slightly ahead of the analyst forecast of $21.9 billion.
But the real growth in sales was more moderate -- 4%, if not for weakness in the dollar. Downdrafts in the U.S. currency can inflate the dollar value of deals done in other currencies.
The first quarter's results followed a well-established pattern at IBM , which has used cost cuts and measures such as stock buybacks to squeeze out earnings gains that have exceeded revenue increases. Last year, profits jumped 20% to $9.5 billion despite virtually flat revenue, and investors pushed the stock up 18%.
But this year the shares have treaded water, as investors are scanning for signs of a new spark inside IBM. Shares rose 94 cents to close at $97.12 on the New York Stock Exchange before the earnings report, almost exactly the price they had when the year began. In extended trading after the earnings report, IBM shares gained $1.83, or 1.9%.