IBM shares took a significant hit before Tuesday’s opening bell after the technology company released early second-quarter financial results that came in below what Wall Street had anticipated.
International Business Machines reported it expects to post an adjusted quarterly profit of $2.93 per share, with revenue coming in at $17.2 billion. Those figures fall short of analyst forecasts compiled by FactSet, which had projected earnings of $3.01 per share on revenue of $17.86 billion.
The company’s stock dropped more than 23% during premarket trading.
In a letter addressed to investors, CEO Arvind Krishna explained that the company’s software and infrastructure divisions underperformed during the quarter, largely because clients redirected their spending toward servers, storage, and memory products ahead of expected price hikes. He also noted that cybersecurity concerns created additional distractions for the business.
Krishna took direct responsibility for the company’s stumble, stating: “These conditions require our teams to execute perfectly, and this quarter we faltered. We did not adapt and move quickly enough, and numerous large deals failed to close on the timelines we expected, driving the majority of our shortfall.”
