Once again IBM reportedIt reported 3Q net earnings of $3.84bn compared with $3.6bn in the third quarter of 2010, an increase of 7%. Operating (non-GAAP) net income was $4bn compared with $3.6bn in 3Q 2010, an increase of 9%. Total revenues for the third quarter of 2011 of $26.2bn increased 8 %(3%, adjusting for currency) from the third quarter of 2010.)

"In the third quarter, we drove revenue growth, margin expansion and increased earnings as a result ofour innovation-based strategy and continued investment in growth initiatives," says IBM chair, president and CEO Samuel J. Palmisano (right). 

“Growth markets delivered outstanding revenue performance across software, hardware, and services and contributed to the company's expanded margins. We also achieved strong results in Smarter Planet, business analytics and cloud.

"Based on this performance, we are raising our 2011 full-year operating earnings per share expectations to at least $13.35."

In a conference call with analysts, reports the New York Times, Mark Loughridge, IBM’s CFO (left)  singled out major sources of strength as the continuing rapid growth of markets abroad, including China, India, Brazil and a few dozen other emerging nations, which grew 19% and now account for 23% of IBM’s revenue.

He also highlights newer products and services like business analytics, helping companies sift through data to spot sales opportunities and streamline operations.

Based on the 3Q and outlook, IBM raised its estimate slightly for full-year profits to “at least $13.35 a share,” up from previous guidance of “at least $13.25 a share.”

Analysts noted however sales were a little less than estimates, and company’s earnings benefited from a lower tax rate than in the first half of the year. It contributed to the dip in after-hours trading, they said, as did profit-taking; IBM shares having run up 27% so far this year.

In the USA, IBM’s business grew by 4%, and it grew 7% in Canada. Software business worldwide grew 13% in the quarter, to $5.8bn biggest growth from its Internet-based commerce software and its data management and analysis software.

IBM's big services business grew 8 %, to $15.2 bn. Hardware sales were up  4%, to $4.5bn. Mainframe sales dropped 5% from a year ago,  IBM attributing that  to comparison with the strong 2010 Q3  when new mainframe lines were introduced.