IBM has had a bad quarter, again. For the tenth straight quarter IBM has reported falling revenue, acknowledging, last monday, failure to meet a key profit goal. Shares slumped as much as 8.4% to $166.69, breaching $170 for the first time in three years. The drop pushed IBM’s market capitalization down by about $14.5 billion reports WSJ.

“We are disappointed in our performance.  We saw a marked slowdown in September in client buying behavior, and our results also point to the unprecedented pace of change in our industry.  While we did not produce the results we expected to achieve, we again performed well in our strategic growth areas – cloud, data and analytics, security, social and mobile – where we continue to shift our business.  We will accelerate this transformation,” explained Virginia Rometty, IBM chairman, president and chief executive officer.

As it tries to pull out of its hardware businesses and expand outreach into data and analytics, the balance hasn’t been met well. It announced a deal with semiconductor manufacturer, Globalfoundries Inc. of about $1.5 billion to take over IBM’s semiconductor operations and supply it with computer chips.

However, their strategies to make Bluemix a mainstream cloud platform player may be somewhat working as TechCrunch points out, with evidence in the latest quarterly report. Cloud revenue is up 50 and cloud as a service by 80 percent, both year-to-date with a third-quarter annual run rate of $3.1 billion.

With dropping S&P 500 ranking and a disappointing quarterly report, how well is this transformation going to turn out remains to be seen.

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(Image credit: IBMPhoto24)