IBM reported growth in all of its key product areas and raised its income guidance for 2011 as net earnings for 2Q11 increased by eight percent to $3.7bn compared to $3.4bn in 2010, the company said late on Monday.

The technology giant, which lifted its full 2011 year forecast to $13.25 a share following results, beat analysts' predictions by $1.35bn with revenues of $26.7bn.

Software revenue increased 17 percent compared with the same period of last year, to $6.2bn.

Samuel Palmisano, CEO and chairman, said: “In the second quarter our long term strategic investments in the company's growth initiatives again helped drive strong revenue performance. Hardware, software and services revenue grew at double digits, and we achieved strong profit and free cash flow growth.”

“Given our strong start to 2011, we are raising our full year operating earnings per share expectations to at least $13.25,” he added.