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International Business Machines Corp's quarterly revenue beat analysts' expectations as the company's shift to high-growth areas such as cloud-based services begins to yield results.
Revenue from "strategic imperatives", which includes cloud and mobile computing, data analytics, social and security software, rose 12 percent in the second quarter.
Cloud revenue jumped 30 percent, compared with 34 percent in the preceding quarter.
Total revenue dropped 2.8 percent to $20.24 billion for the quarter ended June 30 from a year earlier.
The company's 17th straight quarterly revenue decline was not as steep as expected. The average analyst estimate was $20.02 billion, according to Thomson Reuters I/B/E/S.
Net income fell to $2.50 billion, or $2.61 per share, from $3.45 billion, or $3.50 per share.
Excluding items, IBM earned $2.95 per share, beating average analyst estimate of $2.89.
IBM's shares rose 2.8 percent to $164.28 in extended trading on Monday.
(Reporting by Narottam Medhora and Anya George Tharakan in Bengaluru; Editing by Don Sebastian)