IBM expects to double profit by 2015

NEW YORK (Reuters) - IBM said it expects its profit to roughly double to more than $20 a share by 2015, helped by growth in emerging markets as well as the company's push into high-margin technology services and software businesses.

International Business Machines Corp IBM.NY)N> Chief Executive Sam Palmisano told an annual investor briefing that the company expects earnings per share (EPS) excluding items of "at least $20" for 2015.

The company reported EPS of $10.01 a share in 2009, and on Wednesday reiterated its forecast for EPS of "at least $11.20" for 2010.

The upbeat outlook helped IBM shares rise 2.8 percent to $130.46 on the New York Stock Exchange at midday, outpacing the overall market's gain of around 1 percent.

IBM, over the past decade, has been shifting its focus to the more profitable technology services and software from commoditized hardware products.

"More and more of our profits will come from these higher profit segments," Palmisano said.

He also said IBM would benefit from expansion in fast-growing markets like China, where a burgeoning middle class means greater technology spending. He forecast that by 2015, around 25 percent of its revenue would come from growth markets compared with around 19 percent last year.

Palmisano said the company planned to spend around $20 billion in acquisitions through 2015. For all of 2009, IBM spent $1.5 billion on acquisitions, including a $1.2 billion cash deal for business analytics company SPSS Inc.

He added that despite the higher spending, the company would remain disciplined and "very shareholder-friendly."

The outlook was an update to IBM's long-term road map given in 2007, in which it targeted EPS of around $10-11 by 2010.

(Reporting by Ritsuko Ando, editing by Gerald E. McCormick and Matthew Lewis)