For the quarter ending June 30, IBM reported revenue of $24.4 billion, down 2% year-over-year while profits rose 28% to $4.1 billion, or $4.12 per share. Despite the dip in revenue, Big Blue managed to outpace analyst estimates of $24.1 billion in sales, according to data compiled by Bloomberg.

In announcing the numbers, IBM CEO Ginni Rometty noted the progress the company has made so far in its shift toward big data and cloud services as well as security and mobile services. “We will continue to extend and leverage our unique strengths to address the emerging trends in enterprise IT and transform our business, positioning ourselves for growth over the long term,” she said in a statement.

The company said its revenue from cloud services was up more than 50% so far this year, and that it had doubled in the second quarter to $2.8 billion.

As part of its transformation, IBM (IBM) has sold off some underperforming businesses including its low-end server line to China’s Lenovo, a deal that was announced early this year and which recently gained approval from Chinese regulators.

Yesterday, the company announced a new partnership with Apple (AAPL) that will see the two tech giants working together to develop 100 business apps for iPhones and iPads to be sold to corporations.

In after-hours trading, IBM shares fell more than 1% after closing flat in regular trading on Thursday.