IBM came in Monday with Q2 earnings seven cents ahead of expectations at $2.65 or $3.39 billion, up 9.1%, but its $23.72 billion in revenues, up 2%, were $450 million short of the $24.17 billion analysts supposed it would do, adding to Wall Street jitters about spending and the recovery and causing its stock to drop more than 4% after-hours.

The company put the onus on a euro-based ~$500 million currency hit that it claimed Wall Street didn't factor in but it also seems signed service contracts dropped 12% year-over-year to $12.3 billion although 15 deals exceed $100 million. Software was up a slim 2% to $5.3 billion.

IBM raised its full-year earnings guidance by a nickel to $11.25, but that's two cents shy of expectations. The company anticipates introducing new mainframes and Power Systems in the second half. It also means to push deeper into the BRIC countries, up 14% in Q2, and make more acquisitions.