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Ginni Rometty’s terrible, horrible (no good, very bad) day

IBM CEO Ginni Rometty at the 2014 Fortune Most Powerful Women summit in Laguna Niguel, Calif.IBM CEO Ginni Rometty at the 2014 Fortune Most Powerful Women summit in Laguna Niguel, Calif.
IBM CEO Ginni Rometty at the 2014 Fortune Most Powerful Women SummitStuart Isett/Fortune Most Powerful Women

Everybody expected IBM’s third-quarter earnings, reported early Monday morning, to be bad. They just didn’t expect them to be this bad.

In its tenth quarter of consecutive revenue decline, the tech giant (IBM) announced sales of $22.4 billion, down 4% from a year ago. Operating earnings, meanwhile, fell to $3.68 a share, down 10% in the same time period. On the heels of the dismal numbers, IBM’s shares tanked more than 7% on Monday.

The worse-than-expected news has put a lot of pressure on CEO Ginni Rometty, who was recently profiled in Fortune magazine (and, for the third year in a row, was No. 1 on Fortune’s Most Powerful Women list). Some have even called for her to step down. But, disappointing as IBM’s current numbers may be, that is unlikely to be the right antidote to the company’s ills.

“We are disappointed in our performance,” Rometty said in a press release issued along with the company’s earnings. “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. While we did not produce the results we expected to achieve, we again performed well in our strategic growth areas—cloud computing, data and analytics, security, social and mobile—where we continue to shift our business. We will accelerate this transformation.”

Rometty has been on an accelerated path of transformation for over two years, divesting lagging businesses (as part of today’s announcement, IBM will offload its chip unit) and investing in higher-growth areas like mobile, cloud and cognitive computing. She—and the rest of IBM’s executive team—should have moved even faster into cloud infrastructure and software in particular.

To her credit, though, Rometty’s got plenty of believers inside the company. She has rallied and focused Big Blue around newer technologies and made some steady progress in that direction, partly by getting buy-in from IBMers. She has also done more outreach to the investment and startup communities than any previous CEO, and understands that in order to succeed, IBM needs to forge new partnerships and ecosystems.

Yes, the transformation is a slow one—after all, the company sells thousands of products and employs over 430,000 workers across the globe. And Rometty is unlikely to ever get IBM back to its former glory days—the world of technology has changed drastically in recent years. But that doesn’t mean anyone else could do a better job running and transforming today’s IBM. In fact, Rometty has many of the attributes needed to turn the massive company around: Familiarity and buy-in from the workforce coupled with an ability to break away from the past.

The one thing she doesn’t have? Lots of time. (For Wall Street, 10 quarters is an eternity.)

In a recent interview with Fortune, Rometty—unsurprisingly—demurred when asked how long it would take IBM to get back to revenue growth.

“My biggest focus is shifting to high value,” she said. “So, to me, growth is a question of mix [and] we’re already answering that out in the marketplace . . . So, for us, and our investors, what they’re really watching is that do we keep moving to higher value. Growth is, of course, important. But it is more important that we keep moving to high value. And in a time of transformation, you want to keep focusing on your transformation and that you grow the right parts of the business. That’s the most important thing.”

IBM employees may agree with Rometty’s assessment, but it’s not clear impatient investors do.

“From the MPW Co-chairs” is a series where the editors who oversee the Fortune Most Powerful Women brand share their insights about women leaders.