Word on the Street was that International Business Machines (IBM) would turn in second-quarter numbers north of analyst’s expectations. But these numbers were north enough to be called Arctic: After the closing bell on Thursday, the Armonk, New York-based technology behemoth reported a second-quarter profit of $2.77 billion or $1.98 per share - ahead of the $1.82 the sell side had predicted, and massively ahead of the $2.26 billion, or $1.55 a share, it earned in the comparable period last year.
 
Contributing to IBM’s ability to weather the economic downturn is the strength of its Global Services and Global Technology Services divisions, in which the company posted a 12% increase in contract signings. IBM’s service business remains the world leader.

The strength of its performance in international markets was also key: $15.1 billion in revenue came from markets outside the U.S., or approximately two-thirds, as opposed to $10.9 billion from U.S. markets.
 
Moreover, the bottom-line numbers were backed up by a strong sales line: In the second quarter, Big Blue generated $26.8 billion in sales, approximately $800 million over analysts’ forecasts.
 
IBM also raised the earnings bar for 2008 overall: It’s now calling for full-year earnings of $8.75 a share, well ahead of the $8.50 a share it had previously forecasted.

And this isn’t the first time management has raised the bar this year. In January, the estimate was at $8.20 to $8.30 a share - and, to me, even the $8.75 measure looks like it could be conservative.

The party could well continue in the weeks ahead: Analysts are likely to increase their estimates, and fund managers could be drawn to the stock for window-dressing purposes.

But that isn’t to say that you shouldn’t still be cautious: After the close on Thursday, Microsoft (MSFT) offered up some disappointing first-quarter guidance, and Google (GOOG) turned in a lousy second quarter. This could put a bit of a damper on the market in Friday’s trading.
 
IBM closed at $126.52, up 58 cents or 0.46%.