IBM no longer expects to achieve its 2015 operating earnings target of $20 per share after weak client spending resulted in an unexpected fall in quarterly earnings and revenue.

The world's largest technology services company, which said it would announce a new target in January, reported a 4% drop in revenue as clients held back on spending in September.

"IBM needs to find success and growth in the cloud through organic and acquisitive means in our opinion, otherwise there could be some darker days ahead for the tech giant (and its investors)," FBR Capital Markets analyst Daniel Ives wrote in an email.

Chief Executive Ginni Rometty expressed disappointment in the results.

"We saw a marked slowdown in September in client buying behaviour, and our results also point to the unprecedented pace of change in our industry," she said in a statement.

IBM's revenue fell to $22.4bn in the third quarter ended 30 September from $23.34bn a year earlier. 

Analysts had expected $23.37bn, according to Thomson Reuters IBES.

Net profit from continuing operations fell to $3.46bn, or $3.46 per share, from $4.14bn, or $3.77 per share in the same quarter last year.

On an adjusted basis, the company earned $3.68 per share, missing the average analyst estimate of $4.31 per share.

IBM to pay Globalfoundries to take semiconductor unit

IBM said it would hive off its loss-making semiconductor unit to contract-chipmaker Globalfoundries to focus on cloud computing and big data analytics.

IBM will pay Globalfoundries $1.5bn in cash over the next three years to take the chip operations off its hands, the companies said in a statement.

IBM took a related pre-tax charge of $4.7bn in its third quarter.

"They need to narrow their focus, get their A-game on, and any distractions from a core business perspective, such as this deal, need to be put in the rear-view mirror," FBR Capital Markets analyst Daniel Ives told Reuters.

"From an IBM and investor perspective, it takes one troubled area out of the core franchise."

IBM has been reducing its presence in the hardware industry. The company completed its $2.1bn sale of the x86 server business to Lenovo Group earlier this month.

In 2005, Lenovo acquired IBM's consumer PC laptop business for $1.25bn.

The business being sold focuses on chip design and manufacturing and is housed in the company's systems and technology unit, which accounted for about 11% of total sales in the third quarter.

Silicon Valley-based Globalfoundries said it would take over IBM's manufacturing operations in East Fishkill, New York and Essex Junction, Vermont, and offer jobs to substantially all IBM employees affected by the deal.

Globalfoundries Chief Executive Sanjay Jha said the company would invest $10bn between 2014 and 2015 to develop 10 nanometer, 14 nanometer and radio-frequency technologies.

"As (IBM's) assets become part of Globalfoundries, they will benefit from the scale," Jha, the former CEO of Motorola Mobility, told Reuters.

Globalfoundries is owned by the Mubadala Development Co, the Abu Dhabi government's investment fund.

The deal is expected close in 2015.