IBM, the world's biggest computer company, yesterday held out hope of a recovery in the moribund market for corporate information technology, as it announced robust revenue and earnings figures for the fourth quarter.

Signalling the end of the three year decline in corporate IT spending, Mr John Joyce, chief financial officer, said: "I would characterise 2004 as a year when the IT industry will begin its next growth cycle."

The company surprised Wall Street with a stellar performance in IT services bookings and a surge in hardware sales. The company's share price jumped 6 per cent to $95.65 yesterday against the trend of a broad sell-off in technology stocks. Revenues were boosted by a weak dollar, climbing 9 per cent in the fourth quarter to $25.9 billion or 1 per cent in constant currency.

Earnings per share grew 16 per cent to $1.56 after adjusting for year-ago charges related to the $3.5 billion acquisition of PricewaterhouseCoopers Consulting.

IBM's strategic focus on bolstering its IT services business group appeared to be paying off. Despite a difficult overall market, it signed $17.3 billion in services contracts in the fourth quarter, well above analyst estimates of about $14 billion.

The best performance came from its hardware group, growing 4 per cent to $9.1 billion.

This was particularly impressive within a market suffering from price wars. But its chip business continued to struggle as it tried to gain share in high-end contract manufacturing for other companies. A key issue for 2004 will be the strength of a rebound in corporate IT spending.