However IBM shares fell three percent after the company stayed away from issuing a forecast for the current quarter, citing uncertainty around a global economic recovery due to the COVID-19 pandemic.

Chief Financial Officer James Kavanaugh said: “Clients’ near-term priorities continue to include operational stability, flexibility and cash preservation, which tends to favor (operating expenses) over (capital expenses).This is resulting in some project delays and purchase deferrals.”

Revenue from the cloud business, previously headed by Chief Executive Officer Arvind Krishna, rose 19 percent to $6 billion in the third quarter, offsetting weakness in much of its other businesses.

The boost from the cloud business further underscores IBM’s move to focus on its high-margin open hybrid cloud and AI solutions, which together account for more than half of its recurring revenue, by spinning off its IT infrastructure services unit.

“Clients continue to balance short-term challenges and opportunities for transformation ... More of my conversations with CEOs are around how they become digital businesses”, Krishna said on a post-earnings call.

IBM’s total revenue fell 2.6 percent to $17.56 billion in the reported quarter, but was slightly above analysts’ estimates of $17.54 billion.

The global technology services segment, IBM’s biggest unit that caters to some of the world’s largest data centers, reported a  four percent drop in revenue to $6.5 billion.