Shares of U.S. Technology Giant Plunge 23%

According to Sedaye Sama News, citing CNBC, shares of one of the largest U.S. technology companies, IBM, fell sharply on Tuesday after the company released preliminary second-quarter results that came in below market expectations.

IBM reported adjusted earnings of $2.93 per share for the second quarter, with revenue reaching $17.2 billion. Analysts surveyed by FactSet had expected earnings of $3.01 per share and revenue of $17.86 billion.

Following the release of the report, IBM shares plunged 23% in pre-market trading.

IBM CEO Arvind Krishna attributed the company’s weak performance to declining demand in its software and infrastructure businesses. He said customers redirected part of their spending toward purchasing hardware such as memory chips.

In a letter to shareholders, Krishna wrote that during the final weeks of June, many customers shifted their quarterly investment budgets toward servers, storage equipment, and memory chips in order to secure the infrastructure they needed before anticipated price increases.

He added that while IBM had expected supply chain disruptions to affect its performance to some extent, the company had not anticipated such a significant shift in customers’ investment priorities.

Krishna further stated that these circumstances required flawless execution by IBM’s teams, but the company fell short during the quarter. It was unable to adapt quickly enough to changing market conditions, and many major contracts were not finalized on schedule, which significantly contributed to the company’s disappointing results.

According to IBM, declining revenue from sales of computer systems to large enterprises, as well as software used for financial and business transaction processing, further weakened the company’s financial performance.

Source: Tasnim News Agency