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IBM Stock Plummets on Weak Q2 Results
14 Jul
Summary
- IBM anticipates a quarterly profit of $2.93 per share, missing estimates.
- Clients shifted spending toward hardware before anticipated price increases.
- Delayed deal closures and cybersecurity concerns impacted performance.
IBM's shares plummeted in premarket trading after the technology giant revealed preliminary second-quarter results that fell below Wall Street expectations. The company anticipates adjusted earnings per share of $2.93 and revenue of $17.2 billion, missing the projected $3.01 per share and $17.86 billion respectively.
This performance shortfall was largely attributed to clients redirecting their spending towards hardware, including servers, storage, and memory, in anticipation of upcoming price increases. This strategic shift by clients impacted IBM's software and infrastructure segments.
CEO Arvind Krishna also pointed to cybersecurity concerns as a contributing factor to the weaker results. He admitted that IBM faltered in adapting quickly to market changes, with numerous large deals failing to close within the expected timelines, which represented the majority of the revenue shortfall.
