That was not enough to convince investors, however, as the company's shares dropped 6.7% to $122.98 in extended trading after IBM's fourth consecutive quarter of sales decline.
"Our performance reflects the fact that our clients continue to deal with the effects of the pandemic and broader uncertainty of the macro environment," said Chief Executive Officer Arvind Krishna, who took helm last April.
"This puts additional pressure on larger software transactions this quarter and project delays in some services engagements."
Sales from cloud and cognitive, which houses IBM's software offerings and its biggest unit, declined 4.5% to $6.8 billion after two years of growth.
Still, Chief Financial Officer James Kavanaugh told Reuters an accelerated move to cloud by businesses, a sales rebound in the global business services unit and a weaker dollar make the company confident of returning to revenue growth this year.
Total revenue fell 6.5% to $20.37 billion, missing analysts' average estimate of $20.67 billion, according to IBES data from Refinitiv.
Excluding items, IBM earned $2.07 per share, above estimates of $1.79.
(Reporting by Munsif Vengattil in Bengaluru; Editing by Devika Syamnath)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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