IBM (IBM) disclosed a 17% drop in second-quarter profits on Wednesday amid slowing global growth, but the blue-chip company’s adjusted earnings topped views and management raised its full-year outlook.

Previously-slumping shares of Big Blue rallied in extended trading as Wall Street overlooked the company’s sales miss and focused on the rosier outlook.

IBM said it earned $3.2 billion, or $2.91 a share, last quarter, compared with a profit of $3.9 billion, or $3.34 a share, a year earlier. 

Excluding one-time items, it earned $3.91 a share, up 8% from the year before and above consensus calls from analysts for $3.77.  

Revenue dipped 3% to $24.9 billion, trailing the Street’s view of $25.37 billion. Gross margins expanded to 48.7% from 47.7%.

“In the second quarter, we delivered strong performance in our higher-value software and mainframe businesses and again significantly increased our services backlog on growth in new business," IBM CEO Ginni Rometty said in a statement.

IBM’s results underscore the slowdown in growth around the world. 

Americas sales fell 3% to $10.7 billion and revenue in Europe, the Middle East and Africa flatlined at $7.8 billion. IBM said its Asia-Pacific revenue slumped 8% to $5.8 billion. Revenue in Brazil, Russia, India and China, the so-called BRIC countries, was unchanged.

Still, management raised its full-year non-GAAP EPS view by 20 cents to $16.90, which would top estimates of $16.63.

Digging into IBM's quarterly numbers, the company said its global technology services sales slid 5% to $9.5 billion, while its estimated services backlog stood at $141 billion, up 3% year-over-year.

Software revenue rose 4% to $6.4 billion as key middleware products sales jumped 9% to $4.3 billion. On the hardware front, revenue declined 12% to $3.8 billion

Shares of Armonk, N.Y.-based IBM rose 2.21% to $198.85 in extended trading on Wednesday.

IBM has struggled badly to keep up with the broader markets, rising just 1.5% so far this year, compared with almost 18% for the S&P 500 and 16% for the Nasdaq 100.

IBM suffered a 9.2% pullback in June and a 11.4% slump during the second quarter, making it the worst Dow Industrial performer in those periods.

Earlier this month, Goldman Sachs (GS) removed IBM from its Americas Buy List, citing concerns about potential earnings turbulence amid slowing growth in emerging markets.

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