IBM net up as revenue gains 9 pct on software

SAN FRANCISCO - IBM (NYSE: - ), the world's largest technology services company, on Wednesday posted a higher quarterly profit as revenue rose 9 percent, helped by software-company acquisitions and growth in computer services.

Second-quarter net income advanced to $2.26 billion, or $1.55 per share, from $2.02 billion, or $1.30 per share, a year earlier. Revenue rose to $23.8 billion from $21.9 billion.

Analysts, on average, had forecast earnings per share of $1.47 before certain items and revenue of $23.1 billion, according to Reuters Estimates. Second-quarter net income included a gain of $81 million, or 5 cents per share, on the sale of IBM's printer division earlier this year.

International Business Machines Corp., of Armonk, New York, has made more than $5 billion of acquisitions of software makers in the past year to boost sales in its most profitable business, while improving profitability in its technology services unit, its largest business.

IBM shares, which hit a five-year high earlier this week, trade at about 16 times expected 2007 earnings per share, compared with a multiple of 17 for rival Hewlett-Packard Co. (NYSE: - )

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