IBM CEO in letter to investors: What played out was worse than our expectations
IBM shares experienced a historic 25% decline following a disappointing second-quarter performance. CEO Arvind Krishna attributed the shortfall to missed large deals and a shift in customer spending toward infrastructure hardware due to supply chain concerns.
Why it matters
The significant drop highlights volatility in the enterprise technology sector and the impact of supply chain constraints on major legacy tech firms.
IBM shares faced a historical 25% drop this week. This was the company’s biggest fall in almost four decades. In a letter to investors that was released alongside the company's preliminary second-quarter results, IBM CEO Arvind Krishna said IBM "faltered," attributing the weaker-than-expected performance to large deals that did not close and customers shifting spending toward servers, storage, and memory amid anticipated price increases linked to the global memory shortage."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,” Krishna said to investors as revenue missed Wall Street estimates and infrastructure sales declined.Read IBM CEO Arvind Krishna’s full letter sent to shareholdersIn his letter to IBM shareholders, CEO Arvind Krishna wrote, “I want to spend some time explaining what we experienced in the quarter that led to the Software and Infrastructure performance shortfall you see…
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