After the closing bell on Thursday, International Business Machines (IBM Quick QuoteIBM - Free Report) reported robust fourth-quarter 2016 results. The world’s largest computer-services provider topped our earnings and revenue estimates and guided higher for 2017. This suggests that IBM is turning around its fortunes as new strategic business lines like cloud computing, big data and mobile security grow in double digits (see: all the Technology ETFs here).

Earnings per share came in at $5.01, well above our estimated $4.89 and up 3.5% from the year-ago quarter. Revenues nudged down 1% year over year to $21.77 billion and outpaced the Zacks Consensus Estimate of $21.62 billion. This marks the nineteenth consecutive quarter of revenue decline for the company, the longest streak in its history.

Investors should note that that the company has been shifting its focus from its low-margin business lines such as cash registers, low-end servers and semiconductors to strategic growth areas. In particular, revenues from strategic business climbed 11% year over year in the fourth quarter and accounted for 41% of the total revenue.

For 2017, the company expects earnings per share of at least $13.80, much higher than the Zacks Consensus Estimate of $13.63.

Following the huge earnings beat, shares of IBM initially climbed as much as 3% to hit a new 52-week high in the aftermarket hours but pared all the gains eventually, dropping 2.4% at the close. This is because IBM has a Zacks Rank #4 (Sell) and an unimpressive VGM Style Score of C. Further, it belongs to an industry that has a Zacks Rank in the bottom 37% (read: Should You Avoid IBM ETFs Ahead of Q4 Earnings?).

ETFs in Focus

Given the results, ETFs with the highest allocation to this tech giant will be in focus. Investors should closely monitor the movement in these funds and tap the opportunity whenever it arises or avoid these if the stock drags them down in the coming days:

First Trust NASDAQ Technology Dividend Index Fund (TDIV Quick QuoteTDIV - Free Report)

This fund provides exposure to dividend payers within the technology sector by tracking the Nasdaq Technology Dividend Index. The product has amassed about $633.6 million in its asset base while trading in volume of around 98,000 shares per day. It charges 50 bps in annual fees and holds about 97 securities in its basket. Of these firms, IBM takes the fourth spot, making up roughly 8% of the assets. In terms of industrial exposure, the fund allocates more than one-fourth portion in semiconductor and semiconductor equipment, followed by diversified telecom services (15.3%), software (14.7%), technology hardware, storage & peripherals (13.6%) and communication equipment (10.7%).

SPDR Dow Jones Industrial Average ETF (DIA Quick QuoteDIA - Free Report)

This fund follows the Dow Jones Industrial Average, providing exposure to 31 blue-chip U.S. stocks. IBM occupies the third position in the basket with 5.8% share. The ETF is well spread out across a number of sectors with industrials, financials, information technology, consumer discretionary and health care taking the top five spots with a double-digit exposure each. DIA is one of the largest and most popular ETFs in the space with AUM of $14.7 billion and average daily volume of more than 3.4 million shares. It charges 17 bps in annual fees from investors and has a Zacks ETF Rank of 2 or ‘Buy’ rating with a Medium risk outlook (read: What's In Store for Dow ETF in Q4 Earnings?).

Guggenheim Dow Jones Industrial Average Dividend ETF (DJD Quick QuoteDJD - Free Report)

The fund offers an alternative, strategic beta approach to the Dow Jones Industrial Average by weighting each security by dividend yield, rather than price. It follows the Dow Jones Industrial Average Yield Weighted index, holding 31 stocks in its basket. Of these, IBM occupies the fifth position with 4.4% allocation. The product charges 30 bps in annual fees from investors and trades in a paltry volume of around 5,000 shares a day on average. It has accumulated $14.4 million in its asset base so far and has a Zacks ETF Rank of 2.

PowerShares S&P 500 High Quality ETF (SPHQ Quick QuoteSPHQ - Free Report)

This fund tracks the S&P 500 Quality Index, a benchmark of the S&P 500 stocks that have the highest quality score based on three fundamental measures: return on equity, accruals ratio and financial leverage ratio. This approach results in a basket of 100 stocks with IBM taking the sixth spot at 4.3% share. From a sector look, the fund is widely spread across industrials, information technology, consumer staples and consumer discretionary with a double-digit exposure each. It has managed $1.1 billion in AUM and trades in solid volume of around 285,000 shares per day on an average. Its expense ratio is 0.29%. SPHQ has a Zacks ETF Rank of 2 with a Medium risk outlook.

First Trust Morningstar Dividend Leaders Index Fund (FDL Quick QuoteFDL - Free Report)

With AUM of $1.8 billion, the fund offers exposure to stocks that have shown highest dividend consistency and dividend sustainability by tracking the Morningstar Dividend Leaders Index. In total, it holds 98 stocks with IBM taking the tenth spot in the basket with 4.4% allocation. Consumer staples, telecom services and information technology are the top three sectors accounting for at least 17% of the portfolio each while utilities and healthcare round off the next spots with a double-digit exposure each. FDL charges 45 bps in annual fees from investors and trades in solid volume of more than 330,000 shares a day. It has a Zacks ETF Rank of 3 or ‘Hold’ rating with a Medium risk outlook.

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