IBM quarterly revenue falls 1.3% to $21.77 billion despite growth in cloud-based services

(Reuters) — International Business Machines Corp forecast full-year earnings above Wall Street estimates and reported better-than-expected quarterly revenue, helped by growth in newer areas such as cloud-based services and analytics.

IBM’s shares were up 2.9 percent at $171.64 in after-hours trading on Thursday.

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The Armonk, New York-based company forecast adjusted earnings of at least $13.80 per share for fiscal 2017, beating the average analyst estimate of $13.74, according to Thomson Reuters I/B/E/S.

IBM has shown pockets of revenue growth in recent quarters, with newer businesses such as cloud computing and artificial intelligence driving the company’s turnaround efforts.

Revenue from “strategic imperatives”, which includes cloud and mobile computing, data analytics, social and security software, rose 11 percent to $9.5 billion in the fourth quarter, from a year earlier.

Cloud computing revenue across IBM’s segments rose 33 percent. The business includes services such as SoftLayer, which leases online storage space to companies, as well as the BlueMix cloud platform.

Excluding items, IBM earned $5.01 per share, beating analysts’ average estimate of $4.88 per share.

IBM’s revenue fell 1.3 percent to $21.77 billion in the quarter ended Dec. 31, but beat analysts’ expectations of $21.64 billion.

Net income rose to $4.50 billion, or $4.72 per share, from $4.46 billion, or $4.59 per share.

IBM’s shares rose 30.2 percent in the last 12 months, outperforming the 23.2 percent gain in the broader Dow Jones Industrial Average.

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(Reporting by Narottam Medhora in Bengaluru; Editing by Maju Samuel)