IBM on Thursday reported earnings and revenues that were better than most analysts expected for the second consecutive quarter.
But the computer giant known as Big Blue urged Wall Street to interpret the report as an indication of its strength, not a general rebound in technology spending.
IBM said it had been gaining market share in its major businesses, even those for which actual revenues had been flat or down.
The company, based in Armonk, New York, said demand for new information technology products and services was no longer falling among its customers but it did not expect an increase any time soon.
"We're hoping we'll start to see a little bit of an uptick in the second half," said John R. Joyce, IBM's chief financial officer.
IBM's total revenues from its continuing operations climbed to US$23.68 billion in the quarter, up 7 percent from US$22.14 billion the same quarter a year ago.
But analysts said the figures needed to be viewed through the lens of a strong dollar, which inflated the value of sales overseas, and the impact of the addition of services employees when the company acquired PricewaterhouseCoopers Consulting.
"You're looking at flat to modestly down growth if you strip out currency and PwC," said A.M. Sacconaghi Jr, who follows IBM for Sanford C. Bernstein & Company.
IBM shares, which had fallen US$1.54 to US$86.05 in trading before the earnings were released at the close of trading, fell as low as US$84 in early after-hours trading.
IBM said that it earned just under US$1.02 billion in the quarter, or 59 cents per diluted share, down more than 56 percent from the same period a year ago.
Excluding the disk drive business that IBM sold to Hitachi on Dec. 31 for US$1.8 billion, IBM had a net income of US$1.91 billion from its continuing operations, or US$1.11 a share, down 25.5 percent from a year ago.
That figure included a charge of 23 cents a share reflecting adjustments to reserves previously set aside for restructuring and the US$614 million that IBM said it spent integrating the consulting business acquired from PricewaterhouseCoopers. Including the 23 cents, IBM earned US$1.34 a share in the quarter, 4 cents ahead of the Wall Street consensus.
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