NEW YORK (CNNMoney.com) -- Now that IBM is a hot momentum tech stock, it suddenly has to live up to some lofty forecasts.
The company commonly known as Big Blue reported better-than-expected third-quarter earnings Monday, but shares fell in after-hours trading after closing at a new all-time high.
Net income for the quarter was $3.6 billion, up 12% from last year. The tech giant said earnings per share rose 18% from last year to $2.82 per share. Analysts polled by Thomson Reuters expected earnings to be $2.75 per share.
Sales for the Armonk, N.Y., company rose 3% to $24.3 billion, which topped targets of $24.13 billion. Including the benefit of positive currency exchange rates, revenues rose 4%.
IBM chief executive Samuel Palmisano said in a statement that the company is well positioned to continue earnings and sales growth in the future. Looking ahead, he said he is "confident" that IBM will report full-year 2010 earnings per share of at least $11.40.
Analysts currently are predicting the company will report full year earnings of $11.30 per share.
"We continued our steady improvement in the business," Mark Loughridge, IBM's chief financial officer, said in a conference call with analysts. "We used our strong profit and cash position to invest for future growth."
Despite the strong results, shares of IBM fell more than 3% after hours. IBM (IBM, Fortune 500)'s stock rose more than 1% in regular trading Monday. Another prominent tech stock, Apple (AAPL, Fortune 500), reported better-than-expected profits Monday afternoon as well. Its stock also dropped after hours.
IBM has benefited as corporate spending on information technology has remained healthy despite the sluggish economic recovery. It has also been helped by the weak dollar, which boosts profits for companies that do business overseas.
Along those lines, IBM said its results were driven by robust performance in emerging markets such as Brazil, Russia, China and India. Revenues from the so-called BRIC countries jumped 29% in the quarter.
By contrast, sales in the United States rose 3%, while revenue from Europe, Africa and the Middle East fell 6% in the quarter.
IBM reported gains across all of its business units.
Sales in its global services division were up 2% in the quarter, IBM said. Revenue from its hardware unit jumped 10%, while software sales edged up 1%.
However, new contract signings in the company's services division were down 7% to $11 billion, IBM said. Contract signings are considered a barometer of future revenue growth.
Stars of Youtube, Vine, Snapchat, and Twitter are attending this year's White House Correspondents' Dinner. More
A Girl Scouts Cookie Oven rolling out to Wal-Mart, Target, Kmart stores this summer will let you bake those iconic thin mints right at home. More