International Business Machines NYSE:IBM shares tumbled on Tuesday after the company disclosed preliminary second-quarter results that fell short of Wall Street expectations.
IBM said second-quarter revenue was approximately $17.2 billion, below analyst estimates of $17.85 billion. Adjusted earnings came in at $2.93 per share, compared with consensus forecasts of $3.02 per share.
IBM attributed the weaker performance to a shift in customer spending late in the quarter. The company said some clients redirected technology budgets toward servers, storage and memory products amid concerns about supply availability and potential price increases. IBM also cited industrywide cybersecurity issues that may have influenced purchasing decisions.
The update pressured other enterprise software and consulting companies. ServiceNow (NOW) fell nearly 5% in morning trading, while Salesforce NYSE:CRM declined about 5%. Adobe NASDAQ:ADBE, Workday (WDAY), HubSpot (HUBS), Datadog (DDOG) and Microsoft NASDAQ:MSFT each dropped more than 3%.
Consulting firms were also under pressure, with Accenture (ACN) and Cognizant Technology Solutions (CTSH) moving lower.
IBM shares plunged more than 15% after the opening bell. The company is scheduled to discuss full results and its outlook during an earnings call on July 22.