International Business Machines CEO Arvind Krishna admits the company faltered during the second quarter as sales fell below expectations.
International Business Machines CEO Arvind Krishna acknowledged that the company "faltered" during the second quarter in a recent letter to shareholders. The admission follows preliminary earnings results showing lower-than-anticipated sales, primarily because customers shifted spending toward memory and storage products ahead of expected price increases. Krishna noted that the company failed to adapt quickly enough, leading to numerous large deals failing to close on expected timelines. Despite the recent shortfall, the company remains a reliable dividend stock with a 3.1% yield and a 31-year streak of dividend increases. While the stock experienced a significant 25% drop on its worst day in 115 years, analysts view the current situation as a short-term issue. The company continues to invest heavily in future technologies, including the rollout of z17 mainframes for AI workloads and a $10 billion investment in quantum computing over the next five years. The administration of the company maintains a full-year revenue growth guidance of 5%, suggesting a potential recovery for the stock in the second half of 2026.