International Business Machines Corp. said signings of new business at its services division surged during the second quarter, substantially beating Wall Street expectations and signalling businesses are still spending on technology.
Its shares rose 2 per cent as the company also raised its full-year profit forecast and released second-quarter results that beat Wall Street projections.
IBM said on Monday that signings rose 16 per cent from a year earlier to $14.3-billion (U.S.) during the second quarter, easing investor concerns that had arisen after the closely watched number dropped in the first quarter.
Deutsche Bank had said in a research note that Wall Street expectations were for signings of $12-billion to $13-billion.
Investors believe that signings is a key indicator of future profits. But IBM says the focus should be more on total backlog of business, which grew by $15-billion during the quarter to $144-billion.
IBM also reported second-quarter profit, excluding items, of $3.09 per share, beating the average Wall Street forecast of $3.03, according to Thomson Reuters I/B/E/S.
Revenue rose 12 per cent from a year earlier to $26.67-billion, ahead of the average forecast of $25.35-billion.
Shares in the company rose to $178.90 in extended trade after falling 26 cents to close at $175.28 on the New York Stock Exchange. They hit a record high of $177.76 on July 6.
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