IBM upbeat despite profit falls

Many investors see IBM shares as a safe haven from the US downturn

Technology giant IBM reported a 1% drop in profits in the first three months of 2009 but said it remained confident it would weather the recession.

It made $2.3bn (£1.6bn) profit in the period, down from $2.32bn in the same quarter a year ago, on sales down 11%.

IBM has been upbeat on its forecast for 2009, saying its broad mix of services and software left it well-placed.

The figures came as Sun Microsystems - earlier in talks to be bought by IBM - announced a $7.4bn deal with Oracle.

IBM believes it can benefit in the economic downturn as cash-strapped companies seek its help to cut costs and improve IT infrastructure.

The firm said that it had signed new services contracts worth $12.5bn, a decrease of 1%. There would have been a 10% rise if not for currency fluctuations, IBM said.