IBM, the world's largest computer manufacturer, yesterday reported slightly higher second-quarter profits, but said revenues were static and that its second half was at risk of succumbing to some broader economic factors.

IBM, which employs 4,300 people in Dublin, said that its chip-making business would fall off dramatically - making it tougher to offset the effects the strong dollar and investment write-downs will have on profits. Shares fell on the news in after-hours trading on the New York Stock Exchange.

The New York-based company reported net income of $2.0 billion (#2.32 billion), or $1.15 per share, meeting the consensus of analyst expectations. This compared with $1.9 billion, or $1.06 a share, in the year-ago period.

IBM's stock dropped to $100 in after-hours activity, after earlier closing at $104.28, down $4.25 or nearly 4 per cent.

Sales were $21.6 billion for the quarter, which was on a par with the same period a year earlier.