IBM remains a heavyweight in the computer industry

The firm, which recently agreed to pay $320m (�178m) to older staff adversely affected by a change to its pension, made a third quarter profit of $1.8bn.

This net income figure compares to $1.79bn for the same period in 2003.

IBM said it remained confident about future growth, and its share price rose in after hours trading in New York. Its turnover was up 9% to $23.4bn.

All figures were in line with market expectations.

"IBM has been gaining momentum throughout the year, and the strength of our integrated business model gives us confidence as we look toward 2005," said IBM chairman and chief executive Sam Palmisano.

IBM shares rose in after-hours trade to $86.90, after closing up $1.07 at $85.92 on the New York Stock Exchange.