Tech bellwether releases preliminary results a week before earnings were expected, showing revenue and profit misses
IBM's stock plunges after a preliminary release of profit and revenue that were well below Wall Street's expectations.
Shares of IBM took a deep dive in early Tuesday trading toward their worst day in decades, after the technology giant surprised investors by releasing second-quarter results a week ahead of schedule, showing both profit and revenue missing analysts' consensus expectations.
The problem was the launch of the z17 mainframe program, which the company expected to be wrapping up during the second quarter.
"What played out was worse than our expectations, driven by a shortfall in our Z performance and the associated software stack, primarily in transaction processing," CEO Arvind Krishna said in a statement.
The stock $(IBM)$ tumbled 19.1% in premarket trading. That puts it on track for its biggest one-day selloff since the record 23.7% drop on Oct. 19, 1987, a date known as Wall Street's "Black Monday."
He said that in the last few weeks of June clients shifted capital expenditures toward memory purchases, storage and servers ahead of expected price increases, which impacted client buying patterns.
While some supply-chain-related impact to IBM's prior expectations were foreseen, "we did not anticipate the magnitude of the capex reprioritization," Krishna said.
IBM said adjusted earnings per share were up 5% from a year ago to $2.93, but that was below the average analyst estimate of $3.01 compiled by FactSet. That would be the first bottom-line miss for the company in at least five years, based on available FactSet data back to April 2021.
Revenue rose 1% to $17.2 billion, well below the current FactSet consensus of $17.86 billion. The company said software revenue grew 5%, but the current FactSet consensus of $8.14 billion implies 10.2% growth.
The company said it was still working to finish up its financial reporting so the results were "preliminary," and final results, scheduled to be released on July 22, after the closing bell, "could be slightly different."
-Tomi Kilgore
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July 14, 2026 07:50 ET (11:50 GMT)
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