International Business Machines Corp reported a 12 percent fall in first-quarter revenue as the technology company continues to shed unprofitable businesses to focus on cloud-computing initiatives.
Shares in the world's largest technology services company flitted around the unchanged mark in after-hours trading.
It was the 12th straight quarter that the Armonk, New York-based company reported a drop in quarterly revenue, including the effects of currency.
IBM's revenue has been shrinking for three years now as the company sheds low-profit businesses such as cash registers, low-end servers and semiconductors and focuses on emerging areas such as security software and cloud services, but the new businesses have so far failed to make up for revenue lost to divestitures.
Most investors are showing patience with IBM's slow transformation, but there are signs that some are uneasy after a 13 percent decline in its shares over the past 12 months. Some top shareholders have sought help from activist investors to shake up the company, Reuters reported earlier this month
IBM did say that it has generated $7.7 billion in total cloud revenue over the past 12 months, up sharply from the year before. Technology investors are intently focused on the new Internet-based "cloud" model and which companies are making money from it. Amazon.com Inc, a leader in the sector, is expected to disclose financials from its Amazon Web Services cloud unit for the first time later this week.
IBM, which gets more than half its revenue from overseas, also said it now expects a 7 percent impact from currency headwinds in the full year. It said in February it expected more than 6 percent.
Net income fell slightly to $2.33 billion for the quarter ended March 31 from $2.38 billion a year earlier. On a per share basis, profit rose to $2.35 from $2.29 as there were fewer shares outstanding in the first quarter.
Excluding some charges, it earned $2.91 per share, well ahead of analysts' average forecast of $2.80, according to Thomson Reuters I/B/E/S.
Total revenue fell to $19.6 billion from $22.2 billion. That was broadly in line with analysts' average estimate of $19.64 billion.
IBM's shares closed up 3.4 percent at $166.16 in regular trading on the New York Stock Exchange on Monday.