IBM Corp. (NASDAQ:IBM) posted their third-quarter earnings on Monday. The company’s profit had fallen 17%. The analysts were disappointed with the company’s performance that fell short of their expectations. IBM Corp. (NASDAQ:IBM)’s earnings per share were $3.68, excluding the costs of special items. The company generated revenue worth $22.40 billion. Meanwhile, IBM Corp. (NASDAQ:IBM) had expected to earn $4.31 per share, excluding special item costs, and generate revenue equal to $23.37 billion at least.

Ginni Rometti, the CEO, president and chairman of IBM Corp. (NASDAQ:IBM), expressed her disappointment as well. She pointed to the changed behavior of the company’s clients in the month of September and the unforeseen rate of change in the industry. Despite the fact that the company did not earn as much as it had expected, it still managed to perform satisfactorily in its major growth areas that include cloud, big data and mobile. Considering how IBM Corp. (NASDAQ:IBM) is shifting its focus to these areas, this is a good start. The CEO also said that the company will now struggle harder to make the transformation happen quickly – the company is restructuring itself to adapt to the evolving industry by shifting to the aforementioned software products.

IBM Corp. (NASDAQ:IBM) has declared itself unable to maintain its earnings per share forecast for the current fiscal. Just before this announcement, the company had proclaimed plans for paying GlobalFoundries, the sovereign wealth fund of Abu Dhabi, $1.5 billion to devolve its chip business, which has brought nothing but losses to the company in the recent years. This deal involves pretax charges of $4.7 billion. IBM Corp. (NASDAQ:IBM) did not want to spend a fortune on upgrading the technology of its unfruitful, chip-making unit, so the deal with GlobalFoundries seems like the most sensible move. This agreement is also the first step that will sharpen the company’s focus on software products. IBM Corp. (NASDAQ:IBM) said that once they rid themselves of the chip business, they can start focusing more on the research and development of material science and semiconductor technologies.

The deal with GlobalFoundries will definitely affect the employees of IBM Corp. (NASDAQ:IBM). GlobalFoundries said that they will offer jobs to the affected employees. According to the deal, GlobalFoundries will receive its payment from IBM Corp. (NASDAQ:IBM) over the next three years in installments. GlobalFoundries will also receive ownership rights to any technology and intellectual property that is related to the chip-making business. After the announcement, IBM Corp. (NASDAQ:IBM)’s shares decreased by 7% in the premarket trade.

Daniel Ives, an analyst at Capital Markets, said that IBM Corp. (NASDAQ:IBM) must try to grow and become successful in the cloud industry by using acquisitions and organic means. Otherwise, the company may end up losing more than it would gain out of the new business. He also believes that the company needs to maintain strict focus so that it can rebound to its previous value. Any distractions, that can affect the focus of the company, must be given a backseat.

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