IBM shares tumble 23% as preliminary second-quarter results miss Wall Street forecasts
International Business Machines reported an adjusted profit of $2.93 per share on $17.2 billion in revenue, trailing FactSet estimates, while CEO Arvind Krishna cited internal adaptation failures and cybersecurity distractions for the shortfall.
Shares of International Business Machines (IBM) fell 23% in morning trading after the company released preliminary second-quarter results that missed Wall Street forecasts. The technology conglomerate projected an adjusted profit of $2.93 per share on revenue of $17.2 billion, figures that fell short of analyst estimates from FactSet, which had anticipated earnings of $3.01 per share and revenue of $17.86 billion.
CEO Arvind Krishna attributed the performance shortfall to a combination of external market dynamics and internal execution issues. In a letter to investors, Krishna noted that clients were shifting spending towards servers, storage, and memory ahead of anticipated price increases, impacting software and infrastructure performance. Additionally, the company faced distractions from cybersecurity concerns during the quarter.
Krishna acknowledged that the company failed to adapt quickly enough to these shifting conditions. "These conditions require our teams to execute perfectly, and this quarter we faltered," Krishna stated. He explained that numerous large deals failed to close on the timelines expected, which drove the majority of the financial shortfall.
The decline in IBM’s stock price stands in contrast to recent performance by some of its peers in the broader technology sector. For context, Amazon reported strong fourth-quarter fiscal 2025 results with $213.4 billion in revenue, leading to a 31.9% rise in its share price over a single month.
The preliminary nature of IBM’s results suggests that final audited figures may differ from current projections. The specific financial impact of the cybersecurity concerns mentioned by the CEO was not quantified in the release.
