(Reuters) – International Business Machines Corp (IBM.N) handily beat analysts’ quarterly revenue estimates on Tuesday as the technology company’s shift to cloud and security services gains traction.
Shares of the company rose 3 percent to $151 in extended trading. They had dropped nearly 12 percent this year.
Under Chief Executive Ginni Rometty, IBM has in recent years shifted focus to growth areas across its businesses, such as cloud, cybersecurity and data analytics, to counter a slowdown in its legacy hardware and software businesses.
Revenue from these businesses, which IBM calls its “strategic imperatives,” climbed 11 percent to $8.8 billion in the third quarter ended Sept. 30.
Total revenue fell marginally to $19.15 billion from $19.23 billion a year earlier, marking the smallest quarterly decline since the third quarter of 2016.
Analysts on average had expected revenue of $18.60 billion, according to Thomson Reuters I/B/E/S.
IBM said there was “enthusiastic adoption” of its new z Systems mainframe, which began shipping in September.
The company’s net income fell to $2.73 billion, or $2.92 per share, in the third quarter, from $2.85 billion, or $2.98 per share, a year earlier.
Excluding one-time items, IBM earned $3.30 per share, beating analysts’ estimates of $3.28.
Reporting by Pushkala A and Laharee Chatterjee in Bengaluru; Editing by Sriraj Kalluvila