IBM plunges 23% pre market
IBM stock was heading for its largest same-day plunge in nearly 40 years on Tuesday after the company's preliminary second-quarter adjusted earnings and revenue missed analysts' targets.
In a letter to shareholders, CEO Arvind Krishna explained that the shortfall was largely driven by the company's infrastructure business. IBM had anticipated revenue to decline by a low-single digit percentage for the year, starting in the second quarter. "What played out was worse than our expectations," Krishna wrote.
Shares of the tech giant were down 23% at $223.70 in premarket trading, putting them on pace for their largest single-day drop since October 1987. S&P 500 futures rose 0.5%.
Krishna noted that customers abruptly shifted their quarterly budgets toward servers, storage, and memory products at the end of June to beat projected price increases for "supply-constrained infrastructure." Although IBM expected some movement, "we did not anticipate the magnitude of the capex repriorization," Krishna wrote.
*source Barcharts
