International Business Machines last night reported a marked slowdown in business in September and abandoned its 2015 operating earnings target.

It said that weak client spending and a slumping software sector weighed down quarterly revenue. 

IBM shares fell nearly 7% to a three-year low, a blow for legendary investor Warren Buffett whose Berkshire Hathaway is its top shareholder. 

The decline shaved more than $13 billion off of IBM's market cap, which stood at $182 billion at the stock market close on Friday. 

"We are disappointed in our performance," said Ginni Rometty, IBM chairman, president and chief executive officer. 

"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," the IBM boss added. 

IBM, the world's largest technology services company, is struggling to keep up with shifts in the industry. 

The company, once best known for mainframe computers, has been pivoting to higher-margin businesses such as security software and cloud services, but growth in those areas has failed to offset weakness elsewhere.

In a move to rid itself of one underperforming business, IBM also said last night it will hive off its loss-making semiconductor unit to contract chipmaker Globalfoundries. 

But in a sign of the unit's weakness, IBM is paying Globalfoundries $1.5 billion to take the unit over. 

IBM is not the only technology company having a hard time keeping up with the shift to Internet-based software and storage systems.  German software maker SAP cut its 2014 operating profit forecast, citing a faster than expected move to cloud-based software. Oracle has grappled with similar issues. 

IBM will divest low-performing businesses that will contribute almost $7 billion in revenue this year, and plans to continue getting out of those sectors, Rometty said. 

Revenue from the company's cloud service unit, which allows businesses to access software and data remotely, grew more than 50% in the quarter, while mobile revenue doubled. 

Still, they were not enough to offset weakness in servers and other hardware, as well as some software business lines. 

The company is also preparing to take a $600m charge for "workforce restructuring," but did not specify how many employees would be affected.

IBM, which said it would announce a new operating earning per share target for 2015 in January, reported a 4% drop in third-quarter revenues as clients held back on spending in September. 

Revenue fell to $22.4 billion in the quarter from $23.34 billion a year earlier. Analysts expected $23.37 billion, according to Thomson Reuters. 

The company said its net profit from continuing operations dropped to $3.46 billion, or $3.46 per share, from $4.14 billion, or $3.77 per share in the same quarter last year.