IBM Beats, Yahoo Misses

Investors looking for clarity on the state of technology earnings will have to wait at least another day after IBM and Yahoo delivered conflicting earnings reports after the bell on Tuesday.

Big Blue beat earnings estimates by a penny with $1.29 a share earnings, and sales of $21.89 billion matched estimates. Earnings per share were up 14%, while revenues adjusted for the sale of IBM’s PC business were up 1%. IBM cited strong System z mainframe and software sales for the results. The company also said its full-year profit is on track to meet estimates.

Sales in the Americas were up 1%, but declined in EMEA and Asia-Pacific.

If there was a weak spot in IBM’s numbers, it was services bookings, which at $9.6 billion missed analysts’ expectations.

Yahoo, meanwhile, met earnings estimates of 11 cents a share, but revenue after traffic acquisition costs of $1.12 billion, while up 28%, were below $1.14 billion forecasts. Yahoo also offered third-quarter and full-year guidance that left room for disappointment, and the company delayed its new advertsing platform until the fourth quarter. Investors will have to wait until Google’s earnings Thursday night to find out if Yahoo’s results are company-specific or speak to the general health of the search business.

In after-hours trading, Yahoo shares tumbled 10%, while IBM shares gained 2%.

Stocks staged a solid reversal on Tuesday, closing higher after spending much of the day under pressure on a stronger than expected wholesale inflation reading and disappointing sales at Target . Consumer inflation and testimony from Fed Chairman Ben Bernanke will also occupy traders on Wednesday, along with earnings reports from Intel , eBay and Apple .

The Nasdaq rose 5 to 2043, the S&P 500 added 2 to 1236, and the Dow gained 51 to 10,799. Volume rose to 2.48 billion shares on the NYSE, and 2.06 billion on the Nasdaq. Advancers led 17-15 on the NYSE, and 15-14 on the Nasdaq. Upside volume was 53% on the NYSE, and 58% on the Nasdaq. New highs-new lows were 29-200 on the NYSE, and 28-251 on the Nasdaq.

Nortel gained 6% on a software collaboration with Microsoft .

SimpleTech surged on its results, while Sanmina and China TechFaith fell on their results.

Rambus lost 9% on reports that a damage award could be reduced.