IBM has reported second quarter revenues of $24.9bn, missing market estimates of $25.39bn but earning per share of $3.91, which is 14 cents better than analysts forecast.
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Profit was also down at $3.23bn, a drop of 17% compared with the same period in 2012.
Last quarter, IBM's revenues and profit fell short of analysts' forecasts for the first time in eight years.
IBM raised its full-year earnings per share by 20 cents to at least $16.90. This excludes the $1bn in charges for its "workforce rebalancing", which includes layoffs.
In the first half of the year, software revenue was up 4%; services revenue down 4%; systems and technology revenue down 12%; business analytics revenue up 11%; and cloud revenue was up 70%.
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As a result of the poor first quarter, the company cut jobs and focused on data analysis and cloud computing in an effort to stabilise its business.
More than 3,300 jobs were lost. IBM expects the savings in wages to start taking effect in the third quarter.
Although many technology companies have been hit by the global decline in PC sales, IBM insulated itself from the trend by selling its PC division to Lenovo for $1.75bn in 2005.