SAN FRANCISCO (Reuters) - IBM IBM.N on Thursday forecast 2008 earnings well ahead of Wall Street expectations as strong growth abroad made up for weaker results in the United States, sending its shares up 5 percent.

A view of IBM headquarters at la Defense in Paris, May 6, 2005. REUTERS/Philippe Wojazer

“This confirms the company’s belief that the strength in their international operations will offset any domestic slowdown,” said Daniel Genter, president and chief investment officer, at RNC Genter Capital Management.

The world’s largest computer services company forecast 2008 earnings would rise 15 percent to 16 percent, hitting $8.20 to $8.30 per share, while Wall Street analysts had expected $7.91 on average, according to Reuters Estimates.

International Business Machines Corp's bullish view comes amid widespread concerns that a weakening U.S. economy will cut into corporate earnings in technology and beyond, fears that were fanned this week by a disappointing forecast from microchip maker Intel Corp INTC.O.

“We have an uncertain economic environment that we are working through along with the rest of the business world,” International Business Machines Chief Financial Officer Mark Loughridge acknowledged on a conference call.

But he said IBM had a strong services and recurring revenue base that would help it in an uncertain climate.

“International is absolutely the saving grace of these guys,” said Peter Misek, an analyst at Canaccord Adams. “Right now I would not want to be a big tech company that was exposed to the U.S. consumer or heavily exposed to U.S. enterprises.”

After a strong preliminary earnings report earlier in the week, IBM said fourth-quarter net income rose to $3.95 billion, or $2.80 per share, from $3.46 billion, or $2.31 per share, a year ago. Revenue grew to $28.9 billion from $26.3 billion.

Revenue from the Americas rose 5 percent, compared with strong gains in other regions, and computer hardware sales declined.

IBM said in preliminary results on Monday that earnings per share from continuing operations had jumped above analysts’ average expectations, driven by strength in Asia, Europe and emerging countries. IBM said it was on track to reach its 2010 growth target, which calls for earnings per share of $11.

Total revenue from its global services business rose 17 percent. Business services, focused on consulting, had a revenue gain of 17 percent to $4.93 billion, and revenue from technology services, which includes outsourcing and computer maintenance, advanced 16 percent to $10 billion.

Software revenue rose 12 percent to $6.26 billion, and the unit’s gross profit margin improved to 87.1 percent from 86.5 percent. Revenue from computer hardware, including server computers, data storage gear and microchips, fell 3.9 percent to $6.8 billion.

IBM’s Monday announcement sent its stock sharply higher and eased concerns for technology, until recently a safe haven for investors fleeing housing, banking and consumer-discretionary stocks.

IBM shares, down 17 percent before Monday's announcement from a 52-week high on October 11, have added 5 percent this week and trade at about 13 times estimated 2008 earnings per share, about the same as rival Hewlett-Packard Co HPQ.N.

The shares rose 5 percent to $106.20 in after-hours trade from a close of $101.10 on the New York Stock Exchange.