IBM Shares Plunge Following 'Disappointing' Preliminary Second-Quarter Results
IBM (IBM) shares plummeted Tuesday after the company's preliminary second-quarter results fell short of Wall Street's expectations, with Chief Executive Arvind Krishna calling the performance "disappointing." The computer and software company expects revenue to increase 1% to $17.2 billion in the June quarter, missing the FactSet-polled consensus of $17.86 billion. IBM projects operating earnings to increase 5% to $2.93 a share, also lagging the Street's $3.01 views. The company's shares plunged 26% in afternoon trade. Second-quarter infrastructure revenue is seen down 7%, while software revenue is projected to rise 5%. The results were "disappointing" amid software and infrastructure "performance shortfall," Krishna said in a letter to investors Tuesday. IBM expected infrastructure revenue to drop low-single digits for the year, according to the letter. "What played out was worse than our expectations, driven by a shortfall in our Z performance and the associated software stack, primarily in transaction processing," Krishna said. In the last few weeks of last month, clients shifted their quarterly capital expenditure spending toward servers, storage, and memory purchases.
IBM (IBM) shares plummeted Tuesday after the company's preliminary second-quarter results fell short of Wall Street's expectations, with Chief Executive Arvind Krishna calling the performance "disappointing." The computer and software company expects revenue to increase 1% to $17.2 billion in the June quarter, missing the FactSet-polled consensus of $17.86 billion.
IBM projects operating earnings to increase 5% to $2.93 a share, also lagging the Street's $3.01 views.
The company's shares plunged 26% in afternoon trade.
Second-quarter infrastructure revenue is seen down 7%, while software revenue is projected to rise 5%.
The results were "disappointing" amid software and infrastructure "performance shortfall," Krishna said in a letter to investors Tuesday.
IBM expected infrastructure revenue to drop low-single digits for the year, according to the letter. "What played out was worse than our expectations, driven by a shortfall in our Z performance and the associated software stack, primarily in transaction processing," Krishna said.
In the last few weeks of last month, clients shifted their quarterly capital expenditure spending toward servers, storage, and memory purchases.