IBM profits up despite $1bn currency hit

IBM computer system known as Watson at IBM's TJ Watson research centre, Yorktown Heights, New York
Image caption IBM is seen as a bellwether for the technology sector

IBM has announced a rise in profits despite taking a $1bn (£639m) hit on currency movements.

Net profit for the three months to the end of June was $3.88bn, up 6% on the $3.67bn the company made a year earlier. Revenue fell 3% to $25.78bn.

The technology giant also said full year profits would be higher than previously expected.

Some technology firms have warned that tech spending may fall in the second half of the year.

'Raising targets'

"In the second quarter, we delivered strong profit, earnings and free cash flow growth," said IBM boss Ginni Rometty.

"Looking ahead, we are well positioned to deliver greater value to a wider range of clients and to our shareholders."

Analysts said the results were reassuring, particularly at a time when some other technology companies have expressed concerns about investment in the sector from the wider economy.

"They modestly missed on the revenue line, partially due to forex, and slightly on software and hardware revenue," said Amit Daryanani at RBC Capital Markets.

"But the big message is they beat earnings per share [expectations] handily and they're raising the full-year earnings target, and that's probably enough for the stock to keep working.

"It's a sign that this company can keep executing despite the revenue headwinds they have."

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