SAN FRANCISCO -- IBM's ( IBM) second-quarter results later Thursday should come in healthy across its business lines, with special help from a new mainframe server.

The consensus estimate of analysts polled by Thomson Reuters is for revenue growth of 9% to $25.92 billion and earnings growth of 21% to $1.82 a share, excluding special items.

Shares of IBM have clawed their way back from a low of $97.59 early in the year, closing Wednesday at $125.94, just shy of its one-year high of $129.99, recorded at the end of May.

"It's been a stellar stock this year," says Chuck Jones, a buy-side analyst at Atlantic Trust Private Wealth Management. He lauded its gain of greater than 17% since the end of 2007, while the Nasdaq has lost ground.

The firm acquired 153,000 shares during the first quarter, for a total of nearly 620,000 at the end of March.

"At 13 times forward earnings -- in relation to the market -- it is a bit undervalued," Jones says.

"The company's pretty consistent, and we expect them to be consistent even with some economic news in sectors such as banking," said Chris Foster, lead analyst on IBM at Technology Business Research. "The highlights will be in software and services. Hardware looks to be flat."

But investors also will be looking to IBM's results for the health of the tech sector overall.

"They're a very good barometer for the rest of the industry, because of the nature of longer-term deals," Foster said. "They will be a very good measure of how other companies are going to report."

Hardware competitors Hewlett-Packard ( HPQ) and Dell ( DELL) will report earnings in August. Services competitor Accenture ( ACN) reported results in June.

IBM's strongest results likely came from the services sector, which had total revenue of $13.1 billion in the same quarter of last year and grew over 17% year over year during the first quarter of 2008. IBM services continue to leverage growth from emerging markets, from research and development, and "from the heavy lifting of restructuring in the past," TBR's Eugene Zakharov wrote in an email response to questions.

"All these are lined up to help Big Blue reap the benefits and post strong quarterly results," Zakharov added. The dollar's weakness and IBM's broad portfolio of services continue to help.

Foreign exchange added 7 cents to IBM's EPS during the first quarter.

Despite the launch of the company's z mainframe late in the first quarter, which American Technology analyst Shaw Wu said has driven higher margins, the Systems & Technology group will likely be flat, year over year.

The hardware business took in $5.1 billion in the quarter a year ago and was down 6.7% in the first quarter.

Strong sales of the new z model will save the quarter in hardware."The z sounds like it's doing well," Jones says, probably because of a two-and-a-half-year gap since the launch of its predecessor model.

The hardware business does well from a profit standpoint, Foster said. "They just can't move the revenue dial," because IBM already "owns" the mainframe business and is not growing market share in x86 servers and blades, where H-P is strongest, Foster added.

Lack of hardware growth "is not necessarily an IBM problem exclusively," Foster said. "We don't see huge growth from Dell, H-P or Sun Microsystems ( JAVA)."

IBM's software business, which had revenue of $4.8 billion in the period one year ago and grew 14% year over year in the March quarter, will likely have about 12% revenue growth in the second quarter, according to TBR's software analyst Allan Krans.

The business will show the first full quarter of results from the acquisition of Cognos, a business-intelligence software developer, which Krans expects to contribute $250 million to $300 million in revenue this quarter.

Software had a gross profit margin of 83.9% in the first quarter, the fattest of any of IBM's business lines. "Both gross and operating margins will come down" due to research writedowns and Cognos integration expenses that will phase out over the next three quarters, Krans said.

The new z model will also help software sales during the quarter. "A lot of IBM software is still tied to the mainframe platform," Krans said. "You saw some bump up in z-related software revenue in the prior quarter. We will probably see some of that carry forward."