People work on the floor of the New York Stock Exchange (NYSE) on July 7, 2026 in New York City.
Spencer Platt | Getty Images
Shares of International Business Machines fell by double digits on Tuesday after the equipment, software and consulting provider reported preliminary second-quarter results that fell short of expectations.
The technology company reported adjusted earnings of $2.93 per share on revenue of $17.2 billion, below analysts’ expectations of earnings of $3.01 per share and revenue of $17.86 billion, according to FactSet. Shares fell more than 17% in premarket trading.
CEO Arvind Krishna attributed the shortfall to weakness in the software and infrastructure business as customers diverted money to buy hardware such as memory chips.
“In the last few weeks of June, we saw customers shift their quarterly capex to server, storage and memory purchases to secure supply-constrained infrastructure ahead of expected price increases,” Krishna wrote in a letter to IBM investors. “While we expected some supply chain-related impact in our expectations, we did not anticipate the extent of the reprioritization of capital expenditures.”
“These conditions require our teams to perform at their best, and we fell short this quarter. We did not adapt or act quickly enough and numerous large deals were not completed within the expected time frame, leading to most of our deficit,” Krishna added.
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