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IBM's pension plan woes kept the company's third quarter results flat, as a $320m settlement charge erased a double-digit rise in income.

IBM reported revenue of $23.4bn in its third quarter - a nine per cent rise over the $21.5bn reported in the same period last year. The company also posted $2bn in income - a 12 percent rise over the $1.8bn reported one year ago. Including its partial pension plan settlement, IBM's net income for the period dropped to $1.8bn, leaving it very flat for the quarter.

IBM made particular gains from sales to the communications and public sectors and with small- to medium-sized businesses. In addition, it saw revenues rise in the Americas and Asia Pacific regions, while sales to Europe were flat in constant currency.

The company's hardware business was its best performer during the third quarter. Hardware sales rose 12 per cent year-over-year to $7.5bn. Xeon server and mainframe sales carried this unit.

Software sales jumped five per cent to $3.6bn with IBM's middleware products and DB2 database performing well. IBM's services business also posted a 10 percent rise in sales. The company's relatively small financing unit saw revenues drop 11 per cent to $638m.

Overall, IBM expects its full fiscal year results to come in ahead of analysts' estimates. IBM's CFO Mark Loughridge said recent strength in the Americas and Asia has pushed the company's prospects higher than they were at the start of the year. ®

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