IBM slipped past analysts' expectations for fourth-quarter earnings by 2 cents a share. Big Blue earned $2.7bn (£1.84bn), or $1.48 a share, compared with $2.1bn, or $1.12 a share, a year earlier. Analysts polled by First Call expected earnings per share of $1.46. Year over year, revenue grew 6 percent, or $25.6bn, during the fourth quarter, ended 31 December. Many Wall Street analysts had projected at least $25bn in sales. A year earlier, IBM posted revenue of $24.2bn. On a conference call with analysts, chief financial officer John Joyce admitted he didn't have much visibility into 2001, but said IBM was comfortable with analyst estimates for the year. For the first quarter, analysts are expecting a profit of 99 cents a share. For 2001, IBM is expected to report earnings of $4.99 a share on sales of $95.6bn. "It's early in the year and we don't have a better crystal ball than you do," said Joyce. "From what we know today and our fourth quarter results, we are comfortable with consensus estimates for 2001." For 2000, IBM revenue topped $88.4bn, compared with $87.5bn a year earlier. Income reached $8.1bn, or $4.44 a share. Analysts had projected $4.43 earnings per share for 2000. A year earlier, Big Blue's income reached $7.7bn, or $4.12 a share. "We had a very solid fourth quarter which, in many respects, reflects momentum that was building steadily all year," IBM chief executive Lou Gerstner said in a statement. "On one level, this momentum is due to strong execution, and we have increased our market share in many of our most strategic product areas." Analysts had been carefully watching IBM, one of the few major high-tech companies to not issue a fourth-quarter profit warning. Ongoing sales problems coupled with slowing corporate and consumer technology spending hurt Big Blue, but not as severely as some competitors. Because of its size and array of business operations, "IBM is in a better position to spread out the impact of larger problems" affecting the entire computing sector, said Technology Business Research analyst Bob Sutherland. "As we look to 2001," Gerstner said, "there is uncertainty about the economic climate in the US However, IBM's broad portfolio should position us well relative to our competitors." IBM posted overall hardware revenue of $11.4bn, up 10 percent year over year. The PC division, as expected, reached its second straight quarter of profitability. Services revenue grew by 5 percent year over year to $9.2bn, up from 4 percent during the third quarter and 2 percent a year earlier. Software again took a beating, with revenue declining 1 percent to $3.6bn. That compares with a 3 percent decline for the third quarter and 2 percent increase a year earlier. Geographically, revenue from the Americas was $10.8bn, an increase of 3 percent year-over-year. Europe, Middle East and Africa declined 3 percent to $7.4bn. Asia-Pacific grew 13 percent to $5bn. Revenue from manufacturers increased 13 percent year-over-year to $2.4bn, while global financing revenue rose 6 percent to $1bn. Sales of custom hardware and software products to specialised customers declined 11 percent year-over-year to $425. Gross profit margins rose to 37.7 percent, from 36.7 percent a year earlier. See techTrader for the latest technology investment news, plus quotes and research. See Inter@ctive Investor for US tech investor news. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read other letters.