IBM reported fourth-quarter earnings on Tuesday that topped analyst estimates, revealing that strategic businesses like cloud and analytics had grown to represent more than a third of the company's revenue.
The company said it saw adjusted quarterly earnings of $4.84 per share on $22.06 billion in revenue. Analysts had expected IBM to report earnings of about $4.81 a share on $22.02 billion in revenue, according to a consensus estimate from Thomson Reuters.
Those earnings marked a nearly 17 percent decrease from $5.81 a share in the year-earlier period. Revenue fell about 9 percent as reported — or 2 percent when adjusting for currency — according to the company.
But the company said on its earnings call that it expects 2016 operating earnings per share of at least $13.50, missing Wall Street's average expectation of about $15, according to FactSet.
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Although initially little changed after the earnings release, shares in the company fell more than 3 percent in continued after-hours trading.
"We continue to make significant progress in our transformation to higher value." Ginni Rometty, IBM's chairwoman, president and CEO, said in a statement.
The company's strategic imperatives — cloud, analytics, mobile, social and security — grew 26 percent to $29 billion in 2015, she said, adding that those units now represent 35 percent of IBM's total revenue.
"We strengthened our existing portfolio while investing aggressively in new opportunities like Watson Health, Watson Internet of Things and hybrid cloud," Rometty said. "As we transform to a cognitive solutions and cloud platform company, we are well positioned to continue delivering greater value to our clients and returning capital to our shareholders."
In fact, IBM's total cloud revenue increased 43 percent for the year to $10.2 billion — although the company said it would have seen 57 percent growth while adjusting for currency and divestitures.
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The major question for IBM, according to many analysts, is whether it can successfully shift focus from its weakening software business to higher value businesses such as cloud and security. Rometty has said that transformation is a primary goal for the company.
"We're very pleased with the progress," IBM CFO Martin Schroeter told CNBC's "Closing Bell" after the quarterly announcement.
"In our cloud business ... we have a number of approaches to this marketplace," he explained. "Clearly we have a very strong infrastructure as a service offering, and when we look across all of our service offerings, we finished 2015 with an exit run rate at $5.3 billion — and that's across both the infrastructure as a service, the platform as a service, and our software as a service offerings. All showing good growth in the cloud space."
The company said its struggling software segment saw revenues fall 11 percent to $6.8 billion compared with 2014's fourth quarter.
IBM gets more than half its revenue from outside of the U.S., which means that it feel the impact of a strong dollar. In fact, Schroeter said, currency represented about a $7 billion impact on the company's revenue. The CFO said he sees the greenback continuing to represent a "headwind" to revenue and profits.
Looking at IBM's place in the world, the company said its fourth-quarter revenue fell about 8 percent in the Americas (down 4 percent adjusted for currency) compared to the year-ago period. Revenues in the combined Europe, Middle East and Africa segment came in at $7.3 billion — a 9 percent decrease (or 1 percent after currency adjustments). The Asia-Pacific region, meanwhile, saw revenues fall about 10 percent to $4.4 billion (down 3 percent with foreign-exchange considerations).
"For us, China was really no different than what we've seen all year. We have a focus in China, like we do everywhere, on building high-value businesses," Schroeter said, adding that the company secured new mainframe customers in the country.
On the company's work with Apple, Schroeter said the company has delivered 100 apps for iOS devices, and that it has generated $1 billion in signings since announcing the partnership.
After reporting its third-quarter results in October, IBM disclosed that the Securities and Exchange Commission had begun an investigation into how the company records its revenue. Big Blue said the SEC was examining "accounting treatment of certain transactions in the U.S., U.K. and Ireland."
IBM's stock has had a rough go of late, with shares down nearly 18 percent year-over-year. Investor Warren Buffett is a major shareholder in the firm.
—Reuters contributed to this report.