IBM raised its full year outlook after it posted a 15 percent rise in first quarter earnings on strong demand for its software services and growth in emerging markets.

The company said on Tuesday that revenue was flat at $24.7 billion (15.5 billion pounds) compared with the previous year and net earnings were up 7 percent at $3.1 billion in the first three months of the year.

International Business Machines, which has been shifting its focus from hardware to higher-margin services and software over the past decade, said that earnings per share, excluding items, was $2.78 -- beating average analysts' earnings per share estimates of $2.65 and in line with revenue expectations of $24.78 billion.

IBM raised its full year target to at least $15 adjusted earnings per share from previously at least $14.85.

Sterne Agee analyst Shaw Wu wrote in a recent note that there was a fair likelihood IBM would modestly raise its outlook.

IBM competes with business software makers Oracle Corp and SAP AG as well as outsourcing company Accenture and computing giant Hewlett Packard .

(Reporting By Nicola Leske; Editing by Bernard Orr)