International Business Machines forecast weak earnings for this year after reporting an 8.5% fall in fourth-quarter revenue as a strong dollar and tepid IT spending weigh on Big Blue's results. 

Shares of the company, which receives more than half its revenue from markets outside the US, fell 3% in extended trading last night. 

IBM forecast 2016 adjusted earnings of at least $13.50 per share, missing analysts' average estimate of $15 per share, according to Thomson Reuters. 

The strong dollar shaved off $7 billion from IBM's 2015 revenue and reduced its profit by $300m in the fourth quarter, the company's chief financial officer Martin Schroeter said. 

He said he expects currency volatility to lower 2016 pretax profit by $1.3 billion. 

IBM has been shifting away from hardware by selling low-margin businesses such as low-end servers and semiconductors to focus on high-growth areas such as security software and data analytics, besides cloud-based services. 

Yet the new businesses have so far failed to make up for revenue lost to divestitures. 

IBM's fourth-quarter revenue fell to $22.06 billion in the quarter ended December 31. Analysts on average had estimated $22.02 billion. 

Revenue from "strategic imperatives", which include cloud and mobile computing, data analytics, social and security software, rose about 10% in the fourth quarter. 

Total revenue adjusted for currency in the three month period fell 2%. 

Net income fell to $4.46 billion, or $4.59 per share, from $5.48 billion, or $5.51 per share, a year earlier. 

Excluding items, the company earned $4.84 per share, beating analysts' average estimate of $4.81 per share.