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Yahoo's board shakeup won't derail talks to spin off Asian assets, and Cisco earnings are particularly important when it comes to how John Chambers manages expectations, with CNBC's Jon Fortt.

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Big Blue Gets Even Bigger

Published: Thursday, 15 Oct 2009 | 4:51 PM ET

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By: Jim Goldman
CNBC Silicon Valley Bureau Chief

IBM shares are already up something like 58 percent in 2009, so to say the pressure was on this company to report strong earnings is an understatement.

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Worse, merely beating expectations wouldn't be good enough, the analysts said: IBM would also be expected to raise its full year earnings per share guidance, and for a company that's already done it twice before this year, that would be a neat trick.

IBM [IBM Loading... () ]did it. All of it.

The company soundly beat on the top and bottom lines, with $2.40 a share on $23.6 billion. And most importantly, IBM did indeed raise its full year EPS guidance, from $9.70 to $9.85 a share.

IBM continues the trend started by Intel earlier in the week, showing topline growth and raising guidance. For the last several quarters, tech companies have largely been relying on operational excellence and other efficiencies to keep the bottom line growing even as the top line suffered. But now with IBM, and Intel before it, it appears tech companies are finally able to see some renaissance in sales, and that bodes well for the broader economy, particularly when those trends are developing at companies like these. As sales continue to grow, the pressure to cut expenses further to maintain margins and EPS expansion will dissipate, and that could stem the tide of layoffs gripping the America's payrolls.

IBM also anticipates more topline growth into the fourth quarter.

CEO Sam Palmisano proclaimed his optimism in tonight's report, and says the company is "well ahead of pace for our 2010 roadmap of $10 to $11 a share. Despite the good news, IBM shares are giving back about 2 percent but that might be a case of "sell on the news," with shares up 58 percent this year. Says Keith Wirtz at Fifth Third Asset Management: "We expected them to exceed expectations on both numbers. I also think you can interpret that the dynamics within the technology category are vastly improving. I think IT spending appears to be on the mend."

I gotta think that as IBM's report, and its conference call, begin to get absorbed by investors, we'll see these shares turn to the green. It might be a few days, and we'll see what happens when Apple [AAPL Loading... () ], Yahoo [YHOO Loading... () ], eBay [EBAY Loading... () ] and Microsoft [MSFT Loading... () ] report next week, but the breadth of good news in IBM's report is impressive.