IBM's (IBM) on-again, off-again recovery effort slipped into reverse after the company posted mixed second-quarter results. IBM's shares, previously up 8% this year, lost 5% in late trading.

The Armonk, NY-based tech behemoth revealed adjusted profits of $3.84 a share, beating expectations of $3.79 a share. Revenues, meanwhile, came in at $20.8 billion, trailing estimates of $20.9 billion. That represented a 14% drop from last year, the 13th-consecutive quarterly decline for sales at IBM; though excluding divested business units and the weakening of the dollar, sales would have been down only 1%, IBM said.

All of IBM's major units posted a decline in revenue. But IBM said cloud revenue, which has been touted as a major future line of business for the firm, jumped more than 70% adjusting for currency and divested businesses. Cloud revenue over the past 12 months totaled $8.7 billion, or about 10% of the company's total revenue over that period, CFO Martin Schroeter said on a call with analysts.

"We've said from the beginning that this will take some time," the CFO said.

The results weren't much different from the first quarter, when IBM's revenue adjusted for currency and divestitures was unchanged from the previous year. But investors were clearly hoping for more from CEO Ginni Rometty.

Focusing on the positive, Rometty pointed to stronger performing segments in the quarter: "We expanded margins, continued to innovate across our portfolio and delivered strong growth in our strategic imperatives of cloud, analytics and engagement, which are becoming a significant part of our business," she said in a statement.

Those strategic areas, which include IBM's Jeopardy-winning Watson service, already make up more than one-quarter of IBM's total revenue and should reach 40% of revenue in 2018, the company has said. CFO Schroeter declined to disclose the percentage for the current quarter, noting only, "We’re making tremendous progress towards that 2018 goal of 40% of our business."

Rometty's decision to dump IBM's less profitable hardware server unit appeared to pay off in the second quarter. Sales grew 5% in the higher-end business that remained while IBM's gross profit margin gained more than 8 percentage points to 48%.

However, IBM had a particularly tough time in the quarter in the formerly fast growing emerging markets of Russia, China and Brazil, Schroeter said. Although sales in India were up, sales in the four so-called BRIC countries combined fell 18%.

IBM's earnings per share on a fully diluted basis were $3.50 using generally accepted accounting principles, down from $4.12 in the same period last year.