After what must seem like an eternity of heavy losses and layoffs, IBM's PC division turned a profit in the most recent quarter, showing an 11 per cent rise over the same quarter last year. "Personal systems" makes up just over a fifth of Big Blue's total revenue.

Total revenues for the company edged up $3bn on the corresponding quarter last year to $21bn, although profit was down to $5.4bn from $5.6bn.

CEO Gerstner said income was help back by being unable to supply components in sufficient quantities to meet demand, and by a slowdown in orders ahead of the revamped Freeway "System 390" mainframes. Although he probably meant to say "zSeries".

Services makes up IBM biggest business, with $13 bn worth of deals signed in the quarter, although $8bn made it onto the statement. Software declined 3 per cent to $2.9bn. Hardware gross margins were up from 25.5 per cent to 27 per cent over last year's quarter, but are down 4 per cent on the year to date.