ARMONK, NY – IBM’s quarterly earnings have surpassed Wall Street's expectations, jumping 26% and showing continuing strength in a slowing economy.

The company also increased its earnings forecast for the year. In the first quarter, IBM earned $2.32 billion, significantly higher than its earnings of $1.84 billion for the same period in 2007.

Revenue rose 11% to $24.5 billion, or about 3.4% better than the $23.7 billion forecast by analysts; however, company sales were also boosted by currency exchange rates, since the dollar is now lower against other currencies. IBM reported that its earnings would have risen only 4% if not for currency fluctuations.

Even so, this marked the company’s second straight quarter of strong growth. CFO Mark Loughridge said that the company’s sound financial performance reflected a balance between international and U.S. revenue.

IBM also reported improved performance of 6% in U.S. sales, which generates 35% of its revenue. All of IBM's business units showed increased levels of profitability.