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.

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IMAGE: IBM CEO Ginny Rometty AP

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