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IBM's revenue beats Street as cloud push begins to pay off

[BENGALURU] International Business Machines Corp's quarterly revenue beat analysts' estimates, as the company's shift to high-growth areas such as cloud-based services begins to yield results.

Under chief executive Ginni Rometty, IBM has been moving towards areas such as cloud-based services, security software and data analytics, while trimming its traditional hardware business by exiting low-margin businesses.

The company's revenue fell 4.6 per cent to US$18.68 billion in the first quarter ended March 31, but beat analysts' average estimate of US$18.29 billion.

The company posted its 16th straight quarter of revenue decline.

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Revenue from "strategic imperatives", which include cloud and mobile computing, data analytics, social and security software, rose about 14 per cent in the first quarter.

Cloud revenue increased 34 per cent.

Excluding items, IBM earned US$2.35 per share, beating the average analyst estimate of US$2.09.

The company maintained its full-year adjusted earnings guidance of at least US$13.50 per share.

Up to Monday's close, IBM's shares had risen 10.83 per cent this year, compared with the 2.46 per cent gain in the S&P 500 index.