The New York-based firm's operating earnings per share fell 19 per cent to $2.35 in the three months ended 31 March, but this still beat analysts' estimates for $2.09.
The company's shares slumped slightly in early after-hours trading.
IBM's revenue fell 4.6 per cent to $18.7bn (£13.1bn) during this period, however this was ahead of analysts' predictions for $18.29bn.
Revenue from "strategic imperatives" — cloud, analytics and engagement — which IBM has targeted for growth and investment swelled around 14 per cent, while cloud revenue jumped about 34 per cent.
IBM has been moving towards areas such as cloud-based services, security software and data analytics. This has come at the expense of low-margin businesses in its traditional hardware sector.
"We are pleased with the progress we have made helping our clients apply new cognitive solutions and hybrid cloud platforms," Ginni Rometty, IBM's chairman, president and chief executive, said.
"IBM has established itself as the industry leader in total cloud, analytics and cognitive, all of which helped drive our strategic imperatives revenue growth at a strong double-digit rate, substantially faster than the market."