‘Worse than our expectations’: IBM CEO explains what went wrong in the second quarter

IBM shares tanked on Tuesday after the tech giant’s preliminary second-quarter results missed Wall Street expectations, prompting CEO Arvind Krishna to acknowledge that the company had failed to respond quickly enough to changing customer spending patterns. The company reported revenue of $17.2 billion, up just 1% and below analyst forecasts, while infrastructure revenue declined 7%.

In a letter to investors explaining the shortfall, Krishna said IBM had underestimated a sharp change in client spending and struggled to close several major deals within the expected timeframe. “These conditions require our teams to execute perfectly, and this quarter we faltered,” Krishna wrote