A drop in revenue and the cost of layoffs has seen IBM’s net income fall 17% to $3.23 billion in the second quarter.

The US technology giant generated $24.92 billion in revenue between April and June, 3% lower than in the same period of last year.

It also incurred a $1 billion charge in relation to its recent round of layoffs.

Service and hardware sales both fell – 5% and 12% respectively, however the revenue generated from software grew by 4%.

With exceptional items excluded the company’s earnings per share were $3.91 – higher than analysts expectations.

The company’s share price was also buoyed by an increase in its profit outlook for the year, which is now set at $16.90 per share, 20c higher than before.

IBM’s chief financial officer Mark Loughridge said a recent restructuring would begin to bear fruit soon, with the company on target for earnings of $20 per share by 2015.