UPDATE 3-IBM confident in outlook despite slow economy

* IBM repeats 2010 EPS outlook of $10-$11

* Says 2009 EPS of $9.20+ possible with 7 pct revenue fall

* CEO says will not do "crazy deals"

* Shares down 1.62 pct (Adds details on earnings outlook)

NEW YORK, May 13 (Reuters) - IBM (IBM.N) reaffirmed its earnings outlook for this year and 2010, saying its focus on high-margin software and its geographic diversity would help buffer the impact of a weak economy.

Chief Executive Sam Palmisano said on Wednesday that International Business Machines Corp is still targeting earnings of $10 to $11 per share for 2010, slightly above the average analyst estimate of around $9.90, according to Reuters Estimates.

The company also repeated its earnings forecast of "at least $9.20" per share in 2009. That compared with the average analyst forecast of $9.11.

Chief Financial Officer Mark Loughridge said IBM's targets were possible even if revenue at constant currency, which excludes the impact of currency fluctuations, fell 7 percent in 2009, or was flat in 2010.

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.