IBM reported second-quarter earnings Wednesday that exceeded analyst expectations, while revenue came in short of forecasts.
The world's largest technology services company also raised its full-year outlook.
IBM shares were last up nearly 3 percent in after-hours trade.
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Earnings excluding items rose to $3.91 per share from $3.51 per share in the year-earlier period .
Revenue eased 3 percent to $24.9 billion from $25.78 billion.
Analysts had expected the company to report earnings excluding items of $3.77 a share on $25.37 billion in revenue, according to a consensus estimate from Thomson Reuters.
International Business Machines said on Wednesday that excluding a $1 billion restructuring charge related to job cuts, non-GAAP earnings per share expectations were being raised to at least $16.90 from $16.70.
On a GAAP basis, earnings per share were $2.91, down 13 percent; net income was $3.2 billion, down 17 percent.
IBM also said that a "substantional second-half gain" it was expecting in its previous EPS outlook "will not likely be achieved" by the end of 2013.
IBM has been under pressure since coming up short on revenue and profit in the first quarter—its first earnings miss in eight years, which was seen as an ill omen for the IT industry. The company blamed currency headwinds in Japan and some deals its sales reps failed to close.
Last week Goldman Sachs cut IBM's rating from "Buy" to "Neutral," citing limits to earnings upside and rising volatility stemming from the company's increasing reliance on emerging markets.