(Reuters) - International Business Machines Corp (N:IBM) posted a 4.2% fall in quarterly revenue, in line with analysts' estimates, as weakness in its legacy businesses of selling hardware and software offset growth in its high-margin cloud computing unit.
The Armonk, New York-based technology services giant, which wrapped up the mega cloud merger with Linux maker Red Hat Inc (NYSE:RHT) last week, faced years of revenue declines while it shifted focus to the cloud business, away from established businesses such as mainframe servers.
Revenue from the cloud unit, the faster-growing service and a key metric for the company, grew 5% to $19.50 billion (£15.69 billion) in the trailing 12 months.
Revenue from the cloud and cognitive software segment, which includes analytics, cybersecurity and artificial intelligence, was up 3.2% at $5.65 billion and beat estimates of $5.49 billion, according to 3 analysts polled by Refinitiv IBES.
The company's net income rose to $2.50 billion, or $2.81 per share, in the second quarter ended June 30, from $2.40 billion, or $2.61 per share, a year earlier.
Total revenue slipped 4.2% to $19.16 billion, in line with analysts' estimates of $19.16 billion.
Year-to-date the company's shares rose 26% and closed at $143.09 on Wednesday.