IBM said Thursday earnings may grow to about $11 per share in 2010, fueled by stock buybacks, increased profitability, spending on new initiatives and acquisitions.

International Business Machines Corp (down $0.56 to $105.31, Charts, Fortune 500)., the world's largest technology services company, reported earnings of $9.49 billion, or $6.11 per share, in 2006. It expects share buybacks to add about $1.10 and wider profit margins to contribute about $1 to per share earnings in the next three years, according to investor presentation slides filed with the Securities and Exchange Commission Thursday.

IBM, of Armonk, New York, also said savings on retirement spending would add about 90 cents per share to earnings per share growth through 2010. Revenue growth could add 75 cents per share, Chief Financial Officer Mark Loughridge said, according to projections presented in the slides. Another $1.20 per share could come from new initiatives and acquisitions.

IBM, which competes with EDS (down $0.17 to $28.09, Charts, Fortune 500), Hewlett-Packard (down $0.34 to $44.87, Charts, Fortune 500) and Microsoft (down $0.09 to $30.98, Charts, Fortune 500), told analysts and investors it expects to improve profitability in the next three years by boosting software's proportion of total pretax profit to nearly half by 2010, up from about 40 percent last year. IBM, led by Chief Executive Samuel Palmisano, has been shifting to more profitable businesses such as software from lower-margin segments such as computer hardware.

The company sold its personal computer business to Lenovo Group Ltd. in 2005 and its hard-disk-drive unit to Hitachi Ltd. in 2002.

IBM also expects "emerging country" revenue to double by 2010, Palmisano said at an investor briefing at the company's T. J. Watson Research Center in New York.