The figure, which topped predictions of $27.82 billion by analysts polled by Thomson First Call, was helped by the ongoing weakness in the dollar, IBM said.
Samuel J. Palmisano, IBM's chairman, president and chief executive officer, said in a statement that the results were also helped by strong sales in Asia, Europe and emerging markets.
IBM said it earned $2.80 per share in the quarter, handily beating the analysts' forecast of $2.60 per share. The results represent a 24 percent increase over the same period in 2006, when IBM earned $2.26 per share.
Total revenue for 2007 was $98.6 billion, an 8 increase from 2006. Overall earnings for 2007 were $7.18 per share, a rise of 18 percent over 2006, according to IBM.
The company also said it had more than $16 billion in cash on hand at the end of 2007.
Shares of IBM shot up nearly 8 percent on the news in premarket trading Monday, to $105.36.
IBM plans to provide a full earnings report during a webcast on Thursday.
IBM Q4 results boosted by exchange rates
IBM on Monday said fourth-quarter revenue, aided by exchange rates and sales outside the U.S., stood at US$28.9 billion, an increase of 10 percent over the same period in 2006.
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