IBM's Profit to Beat Street Estimates

IBM(IBM Quote) will post third-quarter earnings above analysts' expectations, but revenue will come up short - and neither figure changes the tech giant's full-year profit outlook.

IBM said late Wednesday that continuing operations profit rose 22% to $2.05 a share, while net income grew 20% to $2.8 billion.

Revenue added 5% to $25.3 billion, helped by 3 percentage points of currency benefit.

Gross profit margin rose to 43.3% from 41.3% in they year-ago quarter.

"Our results demonstrate that the combination of a steady base of recurring revenue and profits, investments for growth in emerging markets, a range of products and services that deliver value to clients, and a strong and flexible financial foundation give IBM a competitive edge in good times and tough times," said Samuel J. Palmisano, IBM chairman, president and chief executive officer. "We remain confident in our full-year outlook."

IBM said it continues to expect full-year 2008 earnings of at least $8.75 a share, or year-to-year growth of 22%.

Shares of IBM rose 4.3% in recent after-hours trading to $94.40.