IBM raised its full year outlook after it posted a 15 percent rise in first quarter earnings on strong demand for its software services and growth in emerging markets.
The company said on Tuesday that revenue was flat at $24.7 billion compared with the previous year and net earnings were up 7 percent at $3.1 billion in the first three months of the year.
International Business Machines, which has been shifting its focus from hardware to higher-margin services and software over the past decade, said that earnings per share, excluding items, was $2.78, beating average analysts' earnings per share estimates of $2.65 and in line with revenue expectations of $24.78 billion.
IBM raised its full year target to at least $15 adjusted earnings per share from previously at least $14.85.
Sterne Agee analyst Shaw Wu wrote in a recent note that there was a "fair likelihood" IBM would "modestly raise" its outlook.
IBM competes with business software makers Oracle Corp and SAP AG as well as outsourcing company Accenture and computing giant Hewlett Packard.
(Reporting By Nicola Leske)