Thanks in large part to China, the U.S. market as a whole has taken a beating of late. Unfortunately for IBM (NYSE:IBM) shareholders, it has undergone more than its fair share of negativity. Prior to announcing Q2 earnings after the close on July 20, IBM's stock price was sitting at a respectable $173.22 a share. Following its "disappointing" second quarter results, IBM's share price took a nose dive, declining over $10 per share the next day.

Why the negativity? A 13% drop in revenues to $20.8 billion and the corresponding decline in earnings per share, or EPS, of 15% on a GAAP (including one-time items) basis was more than enough to initiate a sell-off. Now add in the general decline the market's undergone of late, and IBM looks downright beaten up. Which should bring a smile to the face of long-term, value-oriented investors in search of growth and income because there's a bit more to the IBM story than depressed revenues and EPS.

What the Street heard
The $3.84 a share IBM earned in Q2, removing one-time items, actually beat consensus analyst estimates of $3.78: That was the good news. The not-so-good news was revenues came in slightly below expectations of $20.95 billion. The mixed results were enough to incite a 4% decline in share price in after-hours trading, and IBM's stock has continued to feel the pressure since.

On a global basis, IBM took a hit across the board. Revenues in the Americas were down 8%, which paled in comparison to results from its Europe-Middle East-Africa, or EMEA, region which dropped 17%. But the precipitous 35% drop in revenues from the Brazil, Russia, India, and China, or BRIC, markets really took its toll on IBM's bottom line, accounting for a full 2% decline in total revenues. Ouch.

Not surprisingly, revenues from IBM's hardware segment -- like all its legacy units -- also dropped in Q2, a whopping 32%. With so much negativity, it's no wonder IBM's share price is down, right? Not so fast. There's a bit more to IBM's second quarter than its GAAP results.

What IBM actually said
As with any company that has a significant international presence, IBM fell victim to currency exchange rates in Q2: in a big way. The aforementioned declines in revenue across its various business divisions take on a whole new perspective once the impact of a strong dollar is removed from the equation.

That 32% drop in hardware sales is the perfect example of what the strong dollar did to IBM's Q2. Once the impact of currency and the divestiture of its System X business is removed, IBM's hardware revenues actually grew 5% year over year. As CFO Martin Schroeter indicated during IBM's Q2 conference call, "more than 60% of its [IBM's] revenues, and cash flows and profits" come from outside the U.S.

A look at one of IBM's primary competitors, Microsoft (NASDAQ:MSFT) demonstrates just how impactful one-time items and a strong dollar can have on quarterly results. Despite its huge, $7.5 billion charge to write-off the Nokia device unit acquisition, along with another $900 million in other one-time costs last quarter, Microsoft revenues would of only declined 2% compared to 2014's fiscal Q4 if not for the strong U.S. dollar. IBM with its more than 60% of revenues derived from outside the U.S. warrants the same kind of consideration as Microsoft has received from investors.

But IBM's results after factoring in currency and one-time charges still don't tell the whole story. That requires factoring in progress of its "strategic imperatives" units, and that's when things really take a turn for the better.

What really matters
CEO Ginni Rometty is in the midst of transitioning IBM to new, cutting-edge markets like cloud computing and business analytics. IBM has invested billions of dollars in developing new business units to maximize the potential of new technologies, like its Watson cognitive computing wonder, along with its suite of cloud services.

As it has done for several quarters in a row now, Rometty's strategic imperatives continue to thrive. Removing the impact of the dollar and one-time items, IBM's cloud revenues jumped over 70% last quarter and are now tracking at $4.5 billion annually. While not quite as impressive as its cloud sales, business analytics -- another strategic imperative to drive future growth -- also jumped last quarter by more than 20%.

For near-sighted investors, IBM's bottomline revenues are enough to warrant its current stock price woes. But for investors with some patience, and a penchant for a 3.25% dividend yield, IBM is worth a good, long look.