International Business Machines Corp. IBM-N

on Tuesday raised its profit target for 2010 and reported higher fourth-quarter earnings, as cost cuts and a shift to more profitable contracts helped the world’s leading technology services company weather a slump in corporate spending.

IBM, which has spent the past year cutting costs and accelerating its shift to more profitable services and software, said it now expects profit of at least $11 (U.S.) a share in 2010 compared with its previous target of $10 to $11 per share.

The company said its fourth-quarter profit rose to $4.8-billion, or $3.59 a share, from $4.4-billion, or $3.27 a share, a year earlier. Analysts on average had expected a profit of $3.47 per share, according to Thomson Reuters I/B/E/S.

Quarterly revenue rose 1 per cent to $27.2-billion, it said. The average forecast on Wall Street was for revenue of $27-billion.

IBM shares, which had risen close to 60 per cent over the past 12 months, dipped slightly in after-hours trade.

More to come