IBM Chief Executive Sam Palmisano reiterated his outlook for 2010 earnings, saying the company's focus on high-margin software and its geographic diversity would help buffer the impact of a slower economy.

Palmisano said International Business Machines Corp is still targeting earnings of $10 to $11 per share in 2010. The company has also forecast earnings of at least $9.20 per share in 2009.

Over the past decade, IBM has been shifting its focus to software and services from increasingly commoditized hardware. Palmisano said this means it can rely on a steadier stream of revenue, rather than more volatile equipment sales.

We are not like the other companies in the IT industry, Palmisano said at an annual meeting with analysts in New York. We don't have the dependency.

IBM's first-quarter revenue fell 11 percent from a year earlier, but cost cuts helped limit the fall in net profit.

Palmisano also said he believed it was now a perfect opportunity to invest in future growth, but that the company would not do crazy deals.

IBM last month failed to clinch a deal for server and software maker Sun Microsystems Inc , which agreed to be bought by Oracle Corp instead for more than $7 billion.

IBM shares fell 1.5 percent to $102.38 by mid-morning trade, in line with the rest of the market.

(Reporting by Ritsuko Ando)