IBM profit rises, shares jump nearly 5 percent

Eric Auchard

SAN FRANCISCO: IBM, the world's largest computer company, posted better-than-expected quarterly earnings after a rebound in its services and software businesses, and its shares rose nearly 5 percent.

Second-quarter earnings, excluding the effects of a job cut plan, the sale of its PC business and a legal settlement with Microsoft Corp., climbed about 5 percent, and results in most of IBM's businesses beat investor expectations.

Analysts said the report marked a rapid turnaround from the earnings shortfall that IBM had posted in the first quarter, which called into question the health of global technology spending generally and led to a sharp drop in IBM's stock.

"IBM returned to form in this quarter," Chairman and Chief Executive Sam Palmisano said in a statement.