The CEO admitted: “We failed” – and IBM stock plunges by over 22%

stock IBM Drops by over 22% at the opening of trading, after the company warned in advance that the second quarter reports missed analysts’ forecasts. Marketwatch notes that if the movement lasts until the end of the trading day, the stock will record its weakest day since 1987 – that is, the weakest in nearly 40 years.

In the preliminary results published by the company, it expects an adjusted profit of $2.93 per share and revenues of $17.2 billion – below analysts’ expectations, which was a profit of $3.01 per share and revenues of $17.86 billion. The company’s official financial results are expected to be published on July 22.

CNBC reported that CEO Arvind Krishna attributed the disappointing results to weakness in the software and infrastructure sectors, as customers shifted their money toward purchasing hardware products such as memory chips.

“In the last weeks of June, we have seen customers divert their quarterly capital investment budgets to purchase servers, storage and memory components, to secure themselves supply-constrained infrastructure in anticipation of expected price increases,” Krishna wrote in a letter to IBM investors. “While we anticipated some supply chain-related impact in our forecasts, we did not anticipate the magnitude of the re-prioritization of capital expenditures.”

“These conditions require our teams to perform perfectly, and this quarter we stumbled. We didn’t adapt and act quickly enough, and several large deals didn’t close in the timeframes we expected, which led to most of the lack of our results,” added Krishna.