IBM profits rise

IBM has been hit by the effects of the strong dollar

Shrugging off the current tech-stock gloom, computer giant IBM reported an increase in second-quarter profits, saying its wide range of products and services offered the firm some security.

IBM announced net income of $2bn, up from $1.9bn a year ago, and in line with analysts' expectations.

Chairman and chief executive Louis Gerstner said slow spots in the second quarter included the personal computer and hard disk drives businesses, and that the firm was hit by the strong dollar.

"We also were not immune from some of the problems that affected many of our competitors in the second quarter," said Gerstner.

"We expect that these factors will continue to work against us in the second half of the year," he added.

"Additionally, we are now seeing signs of slowing in our microelectronics business."

IBM's stock closed lower on the New York Stock Exchange, ahead of the earnings report. Shares were off $4.25 at $104.28.

IBM has outperformed the American Stock Exchange hardware index by 45% this year.

The hardware index has underperformed the S&P 500 by 10% during the same period.