IBM (IBM  ) has reported a third consecutive quarter of declining revenue in its earnings report, sinking 3% as a result of undershooting expectations.

The reported revenue stood at a value of $18.18 billion, which is 4.7% less than what the company reported this time last year.

On the other hand, IBM did report a better-than-expected earnings of per share of $2.25. It also must be taken into account that the company did alter its reporting structure this quarter as compared to the first quarter, ridding itself of the Technology Services & Cloud Platforms segment while adding the Cloud & Cognitive Software and Global Technology Services business segments instead.

"IBM's investments in innovative technologies coupled with our industry expertise and our commitment to trust and security position us well to help clients move to chapter two of their digital reinvention," IBM CEO Ginny Rometty said in a statement.

The company claims that a lot of the weak financials are the upshot of IBM Z product cycle dynamics, and needing to upgrade to new mainframe technology, a move that augmented values on the cost-side.

"IBM is winning new, even cloud-native, customers before RHT," Nomura Instinet analysts wrote in a note sent to clients on April 9. "OpenShift [a Red Hat product] should help IBM win new customers and new workloads as enterprises begin to usher mission-critical applications from on-premise to public or private clouds."

IBM is expected to close its acquisition of Red Hat later this year, for a total sum of $34 billion. Red Hat is an open-source software and services company that helps businesses streamline their computing strategies as they grow. Since this would be IBM's biggest acquisition until date, the deal would undoubtedly bolster investor confidence in light of a weaker earnings report. It would also endow the company with integral technological capital that is conducive to long-term success, along with more opportunities for both economies of scale and scope.