Despite beating earnings estimates and increasing revenues on a year-over-year basis for the first time in 23 quarters, shares of (IBM) - Get Report were declining more than 4% to $161.87 in after-hours trading on Thursday.

The tech giant reported earnings of $5.18 per share for the fourth quarter, versus analyst estimates of $5.17. Revenue came in at $22.5 billion, up 4% from the year-ago quarter, or 1% when adjusting for currency. IBM also said the new tax bill resulted in a one-time charge of $5.5 billion in the fourth quarter due to taxes owed on accumulated profits abroad and the revaluation of deferred tax assets and liabilities.

Here are the five top takeaways from IBM's earnings release: 

    The fact that 2018 guidance wasn't issued in the press release (IBM said that guidance will be discussed on the earnings call, which is scheduled for 5 p.m. ET) is likely worrying some investors for now.

     Definitely worrying them is the fact that gross margin fell 140 basis points year-over-year on a non-GAAP basis to 49.5%. That's why EPS only beat by a penny even though revenue beat by nearly $500 million. Gross margins fell for all four of IBM's business reporting segments. By comparison, gross margin only fell by 40 basis points year-over-year on a non-GAAP basis in Q3, and management had been upbeat about further margin improvement.

    Nearly all of the revenue beat was driven by the Systems (hardware) unit, which is benefiting from a strong mainframe refresh cycle (IBM Z revenue was up 71%). Cognitive Solutions, which contains much of IBM's software operations, only slightly beat estimates, and the services units slightly missed.

    Foreign exchange was a pretty big tailwind. Revenue growth was 4% in dollars, but just 1% in constant currency. Analysts likely modeled some of this into their estimates, but maybe not all of it.

    Q4 free cash flow of $6.8 billion was better than expected and up from $4.7 billion a year ago, and allowed full-year free cash flow to total $13 billion. IBM previously forecast free cash flow would be "relatively flat" compared with a 2016 level of $11.6B.

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