IBM (NYSE: IBM) has reported revenue decline for 21 straight quarters now. It has tried its hand at disruptive technologies like Blockchain, cloud and security, artificial intelligence (AI), and Internet of Things (IoT). But nothing seems to be working yet.

IBM’s Financials

Revenues for the second quarter declined 5% to $19.29 billion, missing the Street’s forecast of $19.46 billion. Adjusted earnings of $2.97 for the quarter were better than the Street’s estimates of $2.74.

The earnings beat was driven by IBM’s continued drive to manage costs. Operating expenses reduced by 20% in the quarter, primarily due to headcount rationalization initiatives. However, it increased its spend on R&D initiatives which grew 5% over the year.

By segment, revenue from Cognitive Solutions including Watson fell 2.5% to $4.6 billion. Global Business Services revenue was down 3.7% to $4.1 billion. Technology Services & Cloud Platforms revenue fell 5.1% to $8.4 billion and Systems revenue fell 10.4% to $1.7 billion. Global Financing revenue was down 2.2% to $415 million.

Strategic Initiatives revenue for the second quarter grew 7% to $8.8 billion. Within the segment, revenue from cloud grew 15% to $3.9 billion, analytics grew 4%, mobile grew 27%, and security grew 4%. On a trailing twelve-month basis, strategic imperatives revenues grew 11% to $34.1 billion with cloud revenues at $15.1 billion and accounted for 43% of its total revenues for the period.

IBM ended the second quarter of 2017 with $12.3 billion of cash on hand. Debt totalled $45.7 billion, including Global Financing debt of $29 billion. IBM’s free cash flow was $2.6 billion. IBM returned $1.4 billion in dividends and $1.4 billion of gross share repurchases to shareholders. At the end of June 2017, IBM had $2.4 billion remaining in the current share repurchase authorization.

IBM reassured the market that it was still forecasting an operating EPS of at least $13.80 for the full year. The market was looking for a full year EPS forecast of $13.68.

IBM’s New Offerings

During the second quarter, IBM announced the opening of four new cloud data centers in Dallas, Texas, and Washington DC to expand its global cloud footprint. IBM now has more than 55 global cloud data centers in 19 countries.

IBM also announced a partnership with Lightbend to help develop AI and cognitive solutions in the enterprise. Lightbend’s popular Reactive Platform is powered by an open source core and brings developers important capabilities across reactive programming, data, and microservices. IBM will integrate these capabilities across its cloud platform and portfolio of cloud services, including data analytics, cognitive and machine learning, and collaborative data science tools.

IBM also announced the acquisition of Timetoact Group’s XCC digital workplace hub for an undisclosed sum. The technology will join the IBM Connections Cloud platform and scale globally through the launch of a new offering called the IBM Connections Engagement Center – a single, accessible engagement center for organizational news and content.

Market Sentiment

IBM’s dividend yield of over 4% is one of the highest among its peers. Its payout has risen ~400% in the past decade. But it is not enough to keep investors happy. Warren Buffet, IBM’s largest shareholder, has abandoned ship! He cut short his losses by selling one-third of his stake in the company in May.

Of the 26 analyst recommendations for IBM stock, 56% were “hold” recommendations. “Buy” and “Sell” ratings stood at 22% each. A research note by Jefferies reiterated the Underperform rating for IBM and lowered its price target to $125 from $135. It says that although IBM Watson is one of the more mature cognitive computing platforms today, the hefty services component of many AI deployments will be a hindrance to its adoption. It also expects IBM to see increasing competition in the space. Already, much lighter weight solutions from Google and Microsoft are starting to gain traction.

Following the results, Standpoint Research upgraded IBM to Buy from Hold and set a price target of $180 by 2018-2019. However, that hasn’t helped its stock from tumbling to a 52-week low of $143.63. It had hit a 52-week high of $182.79 in February. Shares of IBM are trading at $145.16 with a market cap of $135.3 billion.