Revenues dropped 2% to $24.4bn.
IBM has reported a 2% drop in its revenue generated during the second quarter of 2014 to $24.4bn, mainly due to sluggish software sales.
During the quarter, the company's net income rose 28% to $4.1bn compared to $3.2bn generated during the corresponding quarter last year.
IBM chairman, president and CEO, Ginni Rometty, said: "In the second quarter, we made further progress on our transformation. We performed well in our strategic imperatives around cloud, big data and analytics, security and mobile.
"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."
Revenue from IBM's growth markets dropped 7%, while its revenue in the BRIC countries dropped by 2%.
The company's Systems and Technology segment reported an 11% drop in revenue to $3.3bn, while its software segment dropped 1% to $6.5bn.
The US tech firm has been working to restructure its business to target high-end products such as cloud, mobile security and big data, which it expects will be responsible for half of its profits by 2015.
Recently, IBM revealed plans to invest $3bn over the next five years in research semiconductor programmes focused on creating chips that push the limits of silicon technology to 7nm and below.