In a statement Tuesday, IBM reported third quarter earnings from continuing operations of $2.4 billion, or $1.68 a share, on revenue of $24.1 billion, up 7 percent from the third quarter a year ago.
IBM was expected to report earnings of $1.67 a share on revenue of $24 billion. For the fourth quarter IBM is expected to report earnings of $2.60 a share on revenue of $27.7 billion, but Big Blue didn't give an outlook in its statement.
As expected, IBM's services unit shined with revenue up 14 percent. That growth was the highest since the third quarter of 2003. Consulting and application management services revenue was up 16 percent. Global technology services revenue was up 13 percent. IBM signed services contracts totaling $11.8 billion in the third quarter and had a contract backlog of $116 billion as of Sept. 30.
Revenue from IBM's systems and technology group came in at $4.9 billion, down 10 percent from a year ago. System z server products fell 31 percent from a year ago. System i server sales fell 21 percent.
Software was a bright spot for IBM as revenue in the quarter came in at $4.7 billion, up 7 percent from a year ago. IBM middleware product sales were up 6 percent from a year ago to $4.7 billion.