Story updated with IBM share price and conference call comments from CFO Mark Loughridge.



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(IBM) - Get International Business Machines (IBM) Report

missed Wall Street's revenue


in its second-quarter results, but grew earnings despite currency pressures.

The tech bellwether brought in sales of $23.7 billion, up from $23.3 billion in the same period last year, but below analysts' estimate of $24.17 billion.

Excluding items, IBM earned $2.61 a share, compared to $2.32 in the same period last year. Analysts surveyed by Thomson Reuters had predicted earnings of $2.58 a share.

IBM's stock was falling $5.58, or 4.3%, to $124.21 in extended trading, as investors digested the numbers.

Speaking during a conference call after market close, IBM CFO Mark Loughridge explained that the company grew its quarterly earnings despite a consant currency headwind of 10 to 11 cents a share.

"This quarter, we dealt with a currency headwind caused by the strengthening of the dollar," he said, adding that IBM has a strong track record of earnings growth. "We have delivered double-digit EPS growth in 12 of the last 14 quarters."

IBM, which

recently strengthened its long-term financial forecast

, has focused its attention on high-margin areas such as software and services in recent years.

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The company's second-quarter software revenue was $5.3 billion, up 2% compared to the prior year's quarter. IBM total global services business was also up 2% year over year.

"We had a strong close with our software business," said Loughridge, in response to an analyst's question, during the conference call. "We had a very strong third month of the quarter."

Strong results



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had fuelled expectations for IBM, so investors responded negatively to the company's results.

Oracle CEO Larry Ellison also

took a swipe at IBM

recently, explaining that his company's Exadata database machine is making inroads against the hardware giant.

Loughridge retaliated during Monday's conference call, explaining that IBM is grabbing significant business from Sun Microsystems, now part of Oracle. IBM, he explained, has grabbed some 620 deals from Sun over the last six quarters, equalling almost $650 million of business.

The hardware and software maker also raised its 2010 earnings projection to at least $11.25 a share on Monday. Analysts surveyed by Thomson Reuters had predicted full-year earnings of $11.27 a share.

-- Reported by James Rogers in New York

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