Updated from 9:37 a.m. EDTA deeper look at IBM's ( IBM) third-quarter earnings release put investors in a forgiving mood Tuesday morning. Amid a burst of positive analyst commentary, shares of the hardware and services giant rose $1.41, or 1.7%, to $84 in recent trading. While noting a spotty revenue performance, Wall Street embraced strong margins and hardware sales in bidding up the stock. After the bell Monday, IBM posted third-quarter earnings of $1.52 billion, or 94 cents a share, on sales of $21.53 billion. During the same quarter last year, the company earned $1.55 billion, or 92 cents a share, on sales of $23.35 billion. The latest quarter included a one-time charge this year of 32 cents a share for the repatriation of overseas profits. Excluding that, IBM earned $1.26 a share in the third quarter, compared with a precharge $1.03 a share in the same period a year ago. IBM's bottom line easily beat analyst estimates of $1.13 a share excluding items, as gathered by Thomson First Call. But sales fell short of the $21.71 billion that Wall Street targeted, by more than $100 million. Excluding 2004 revenue from IBM's PC business, which the company sold May 1, third-quarter revenue increased a modest 4% from the same period a year ago. Still, analysts at Goldman Sachs, Bear Stearns and Citigroup all reiterated buy ratings Tuesday morning and raised their earnings targets for the fourth quarter and 2006. Two of the analysts set 12-month price targets of $100 on the stock. "IBM's Q3 results were solid, and soundly reaffirm our belief that the company's earnings power is stronger than many investors realize," Bernstein analyst Toni Sacconaghi wrote in a note Tuesday. "We note that IBM's quarterly strength is not really a reflection of any market strength, but rather of several positive unique forces at work at IBM, namely its work force reductions, improving microelectronics business, healthier services profile (less backlog erosion, better mix of business), and new mainframe cycle, all of which are likely to continue in Q4," he added.