IBM has bucked the economic slump by announcing earnings for quarter 4 of 2008 of $3.28 (£2.37) per share, a 17 percent increase on last year. However, the company said total revenue for the quarter dropped 6 percent to $27bn.

ibm_logo Analysts had on average predicted earnings of $3.03 per share and $28.15bn in revenue.

Net income for the fourth quarter was $4.4bn, a 12 percent increase on 2007. For the full year, IBM posted company records for revenue, with $103.6bn pre-tax profit and earnings per share at $8.93.

The company said it expected earnings per share of at least $9.20 in 2009. Chief financial officer Mark Loughridge said he expects the first half of next year to be more difficult than the second. Revenue growth will be relatively flat in the first quarter but then expand, he added.

IBM said the strong US dollar contributed to its drop in fourth-quarter 2008 revenue. When adjusted for currency fluctuations, revenue would have fallen onE percent, the company said.

Software revenue grew three percent, but Global Technology Services and Global Business Services fell 4 and 5 percent, respectively, an indication that customers are pulling back somewhat on IT projects.

However, IBM also reported service engagements worth $17.2bn, including some 24 deals with a price tag higher than $100m.

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IBM's Systems and Technology division took a significant hit, dropping 20 percent to $5.4bn, a sign that customers are holding off on hardware purchases. Fourth-quarter revenue was weakest in Europe, the Middle East and Africa, where it fell 12 percent. Revenue from the Americas fell two percent and Asia-Pacific dropped one percent.

IBM said it achieved its results by focusing on improving profit margins and investing in growth markets, although it also benefited from a lower tax rate. Its tax rate was 23.8 percent for the quarter, compared to 28 percent in the same period last year.

The company also didn't announce any major layoffs, which have been the subject of rampant rumors in recent weeks.

"Right now we're in wait-and-see mode," said Lee Conrad, national coordinator of the Alliance at IBM/CWA Local 1701, a union that is trying to organise workers at IBM. "We do know people have been told to look for other jobs."

The union is calling on IBM to take certain measures to avoid layoffs, such as suspending its stock buyback program, eliminating executive positions and cutting executive pay. It also wants IBM to be transparent about where any job cuts are taking place and whether they are being moved offshore.

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