NY—IBM shares plummeted more than 5 percent in after-hours trading Monday following its third-quarter earnings report that revenue fell for the 14th straight quarter and missed analyst expectations. It also forecast guidance for the year weaker than analysts expected as it transforms from its legacy hardware business to cloud, mobile and other “strategic imeratives.”

IBM reported $3.34 a share in earnings on $19.28 billion in revenue, lower than the $19.62 billion expected and the worst since 2002 and $300 million short of analyst expectations. It even fell below the lowest consensus estimate of $19.292 billion. It had $3.46 in the third quarter in the same period last year.

While the earnings per share figure topped estimates, it was due to reducing its effective tax rate from continuing operations to 18.2 percent, 2.6 percent lower than last year. Without this maneuver and a $1.5 billion stock buyback, it would have missed the earnings estimate as well.

The company has said the rising U.S. dollar is responsible, with IBM CFO Martin Schoeter telling CNBC after the report that “We have a pretty substantial currency headwind as we continue…to transform our business.”

The company also indicated that more layoffs are comings as Schoeter said the company will continue to “remix its skills” as it moves into cloud and mobile computing and away from the legacy hardware business on which it built its reputation.

Schoeter said “The core is a declining market.” He noted the company always said the transformation would take time.

Among the few bright spots in the dismal report, cloud earnings rose by $9.4 billion in the last 12 months. Revenue from other areas into which IBM calls its strategic imperatives, mobile, security, analytics and social, the company saw a 9 percent increase from the same period last year.

Total revenue for its strategic imperatives rose 27 percent year over year, up 17 percent, as reported, adjusted for currency and divested business.

IBM said it expects full-year 2015 to be $14.75 to $15.75 a share. Analysts forecast about $15.68 a share.

“This is a long term play,” Schoeter said, but added that “Our third-quarter results reflect the progress we’re making” in the transformation from legacy to the strategic imperatives businesses.

IBM CEO Ginni Rometty said last week that IBM is shrinking “by design,” but it’s clear its legacy businesses are shrinking faster than the strategic imperatives are growing.

IBM stock fell about 18 percent during the last 12 months. Shares traded at $142.28 down $7.05 or 4.7 percent in pre-market trading Tuesday morning.