Overview
US technology firm's preliminary Q2 revenue rose 1% but missed analyst expectations
Preliminary adjusted EPS for Q2 missed analyst expectations
IBM shares tumble 16% in pre-market trading
Company cites Z mainframe shortfall, capex shifts, and cybersecurity concerns for weak results
Outlook
IBM says it will provide full-year expectations during its July 22 earnings call
Result Drivers
MAINFRAME SHORTFALL - Co said weaker-than-expected Z mainframe and associated software sales, especially in Transaction Processing, drove revenue and profit shortfall
CAPEX SHIFT - Clients shifted capex toward servers, storage, and memory ahead of expected price increases, disrupting typical buying patterns and impacting results
CYBERSECURITY DISTRACTIONS - Rapidly evolving cybersecurity concerns distracted clients and contributed to delays in closing large deals
Company press release: (Full Story)
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Revenue | Miss | $17.20 bln | $17.86 bln (16 Analysts) |
Q2 Adjusted EPS | Miss | $2.93 | $3.02 (17 Analysts) |
Q2 Gross Margin | 57.70% |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 16 "strong buy" or "buy", 8 "hold" and 2 "sell" or "strong sell"
The average consensus recommendation for the it services & consulting peer group is "buy"
Wall Street's median 12-month price target for International Business Machines Corp is $293.00, about 1% above its July 13 closing price of $290.23
The stock recently traded at 22 times the next 12-month earnings vs. a P/E of 19 three months ago
For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.
(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)