IBM Q2 PROFIT JUMPS 22 PER CENT

San Francisco

IBM Corp's second-quarter profit leaped 22 percent, blowing past Wall Street's estimates as the technology company's bread-and-butter services division continued to thrive despite economic malaise in the US.

The Armonk, New York-based company also raised its profit outlook for 2008, saying it expects to earn at least $8.75 per share on the year, an improvement of 25 cents per share over IBM's previous guidance.

The large jump reflects IBM's optimism that it will continue to benefit from its broad international penetration and highly profitable blend of services, software and hardware.

More than half of IBM's business comes from selling services to companies looking to cut costs or better manage their information technology infrastructure. That business has held up remarkably well for IBM despite fears that the economic downturn in the US has started to pinch off corporate spending in other parts of the world.