Computer giant IBM profits rise

IBM said it saw a strong finish to 2006

Computer giant IBM has reported an 11% rise in quarterly profits, boosted by recent software company acquisitions.

The world's biggest technology services firm said net income rose to $3.54bn (£1.8bn) in the three months to the end of December, up from $3.19bn in 2005.

However, despite topping most Wall Street forecasts, shares in the US firm fell in extended-session trading on the New York Stock Exchange.

IBM shares dropped more than 4% after ending the day down at $99.45.

"It looks like a great quarter, but it was priced in," said Jerome Heppelmann, chief investment officer at Liberty Ridge Capital.

Despite the lack of support from investors, IBM chief financial officer Mark Loughridge said the company had experienced "a very strong finish to the year".

IBM reported $17.8bn in services contract signings, which are regarded as a key measure of future revenue.