IBM’s cloud business helped it top Wall Street revenue targets

IBM benefitted from new and old businesses in the third quarter, as its cloud computing offerings as well as sales of its heavy-duty mainframe systems helped the company beat Wall Street revenue targets.

Shares of IBM were up nearly 5% in after hours trading on Tuesday, following the earnings release.

IBM’s overall revenue declined slightly on a year-over-year basis, marking the company’s 22nd consecutive quarter of declining revenue. But IBM appears to be growing where it counts, with revenue from “strategic imperatives” increasing 11%, thanks to cloud computing and software-as-a-service offerings.

The company’s recently released System Z mainframe computers also bolstered the top line, with total systems revenue growing 10% year-on-year to $1.7 billion.

Here’s what the company reported:

    Revenues (GAAP): $19.15 billion, down from $19.23 billion in the year ago period, but above analyst estimates of $18.59 billion. Earnings per share (non-GAAP): $3.30, compared to analyst estimates of $3.28. Projected earnings for fiscal 2017 (non-GAAP): $13.80, compared to analyst estimates of $13.75.

Cloud services – one of the company’s key areas of focus – saw revenues of $4.1 billion for the quarter, up 20% from the third quarter last year. Last quarter, cloud revenues were at $3.9 billion, up 15% from the second quarter last year.