IBM beats forecasts in early results

IBM Corp. announced its third-quarter results earlier than expected Wednesday, and the company beat Wall Street’s profit estimate and reaffirmed its full-year 2008 guidance. The stock, a component of the Dow Jones industrial average, gained nearly 6% in after-hours trading on the news.

The Armonk, N.Y.-based technology company said after the stock market closed that it earned $2.05 a share in the July-September period, 4 cents higher than the average estimate of analysts polled by Thomson Reuters. Net income was $2.8 billion, an increase of 20% over the same period last year.

Sales rose 5% to $25.3 billion but fell short of Wall Street’s expectations. Excluding the effects of currency fluctuations, IBM’s sales increased 2%.

Analysts were expecting sales of $26.5 billion, but some had started to lower their forecasts ahead of the unexpected announcement Wednesday because of a strengthening U.S. dollar and the deteriorating economy.

IBM maintained its forecast of at least $8.75 a share in profit in 2008, a 22% improvement over last year.

IBM shares rose $5.35 to $95.90 in extended trading after closing down $5.10, or 5.3%, at $90.55.