International Business Machines Corp reported its 19th straight quarter of declining revenue, but forecast full-year earnings above Wall Street estimates due to growth in newer areas such as cloud-based services and analytics.

However, investments to drive growth in the cloud business and the company's shift to a subscription-based as-a-service model hit its operating gross margin by 1.8 percentage points to 51 per cent in the fourth quarter.

IBM's shares were down 2.5pc at $162.70 after rising briefly in extended trading.

CFRA Research analyst David Holt said the company's results still raised questions as to when revenue would grow.

"The 800-pound gorilla in the room is the overall inflection point towards revenue growth. That's the moving target," Holt said.

IBM forecast adjusted earnings of at least $13.80 per share for fiscal 2017, beating the average analyst estimate of $13.74, according to Thomson Reuters I/B/E/S.

Chief Executive Gini Rometty's transition efforts have shown revenue growth across some areas in recent quarters, with newer businesses driving the efforts.

Rometty has also been supportive of President-elect Donald Trump's tax reform proposal. The proposal would allow companies in the United States to reinvest in training and educational programs for their employees, Rometty wrote in a letter to Trump in November.

"When you have an administration that is pro-export ... we can see a benefit from that, and if we get fundamental tax reform, that could, on balance, help us as well," Chief Financial Officer Martin Schroeter told Reuters on Thursday.

Revenue from "strategic imperatives", which includes cloud and mobile computing, data analytics, social and security software, rose 11pc to $9.5 billion in the fourth quarter, from a year earlier. It contributed 41pc to IBM's total revenue in 2016.

Cloud computing revenue across IBM's segments rose 33pc. The business includes services such as SoftLayer, which leases online storage space to companies, as well as the BlueMix cloud platform.

Excluding items, IBM earned $5.01 per share, beating analysts' average estimate of $4.88 per share.

The company's revenue fell 1.3 percent to $21.77 billion in the quarter ended Dec. 31, but beat analysts' expectations of $21.64 billion.

Net income rose to $4.50 billion, or $4.72 per share, from $4.46 billion, or $4.59 per share, helped partly by a lower tax rate.

IBM's shares rose 30.2pc in the last 12 months, outperforming the 23.2pc gain in the broader Dow Jones Industrial Average.

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Spread of hate
Updated 18 Jun, 2025

Spread of hate

HATE speech is not confined to words; in fact, there is a causal link between hateful rhetoric and real-world...
Big challenges
18 Jun, 2025

Big challenges

BALOCHISTAN’S Rs1.028tr budget, featuring a public development investment of Rs245bn and provincial surplus of...
Rampant disinformation
Updated 18 Jun, 2025

Rampant disinformation

WITH the arrival and proliferation of digital media, the creation of information is now a decentralised function,...
Window dressing
Updated 17 Jun, 2025

Window dressing

Meanwhile, the provinces lack the resources and expertise to implement adaptation measures effectively.
No revenue effort
17 Jun, 2025

No revenue effort

WITH the ruling PML-N’s next budget unfolding large infrastructure schemes, and expenditure focusing on service...
Pomp and circumstance
17 Jun, 2025

Pomp and circumstance

THE sight of columns of tanks rolling down a boulevard, accompanied by troops goose-stepping in lockstep, was a...