The stock of IBM (IBM) is down 20% after the technology firm warned that its second-quarter financial results have fallen short of Wall Street’s expectations.
The hardware, software and consulting provider released preliminary results for the April through June period that fell short of analysts’ consensus forecasts.
The company announced earnings per share (EPS) of $2.93 U.S. a share on revenue of $17.2 billion U.S.
Those results were below expectations for earnings of $3.01 U.S. a share and revenue of $17.86 billion U.S., according to data from FactSet (FDS).
IBM CEO Arvind Krishna blamed the poor results on weakness in the software and infrastructure business.
He added that IBM’s clients shifted money during the quarter to hardware purchases, notably memory chips that are critically important to running artificial intelligence (A.I.) applications.
“We saw clients shift their quarterly capex spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases,” Krishna wrote in a letter to investors.
The CEO added: “These conditions require our teams to execute perfectly, and this quarter we faltered.”
IBM is scheduled to report its full second-quarter financial results on July 22.
Prior to today (July 14), IBM’s stock had risen 2% in the last year to trade at $290.23 U.S. per share.
Tech Insider
