Boosted by double-digit sales increases and margin improvements in the global technology services unit, the systems and technology division and the software business, IBM's net income rose to $3.95 billion, or $2.80 per share, up 12 percent from $3.54 billion or $2.31 per share in the year ago quarter.

Revenue at the integrated software, services and technology consulting company climbed to $28.9 billion, slightly exceeding the consensus analysts' forecast of $28.2 billion. In the year ago quarter, IBM reported revenue of $26.3 billion.

The strong performance by IBM, a bellwether of the high-tech world, is bound to provide some relief to hassled investors who were beginning to wonder if the economic weakness in the United States would cripple activities in the rest of the globe.

Delighted investors lifted IBM's stock in after-hour trading by slightly more than one percent to $102.10. The stock closed at $101.10 during normal trading hours on Thursday, January 17, down about 0.5 percent.

"IBM had a terrific fourth quarter and full year with record revenue, profit and cash," said Samuel J. Palmisano, chairman, president and CEO of the Armonk, New York, company in a statement.

"The broad scope of our global business—led by strong operational performance in Asia, Europe and emerging countries—as well as continued growth in services and software drove these outstanding results," Palmisano added.

IBM's 10 percent revenue increase was driven by the 16 percent or more increase in sales posted by the company's technology services and business services segment.

Revenue in the global technology services division climbed to $10 billion, up from $8.6 billion in the 2006 fourth quarter while the business services unit experienced a 17 percent sales jump to $4.93 billion compared with $4.22 billion in the year-ago quarter.

Overall, the company's gross profit margin increased to 44.9 percent from 44.6 percent during the quarter and 42.2 percent versus 41.9 percent for the entire year.

IBM did not provide a forecast for the current quarter although Palmisano said the company is "well-positioned as a result of our global business reach, solid recurring revenue and profit streams, and strong financial position."