GoKawiilInternational Business Machines CEO Arvind Krishna told CNBC on Wednesday that the Iran war and other geopolitical uncertainty are leading the company to guide cautiously.
IBM beat analyst first-quarter earnings estimates on the top and bottom lines, but maintained guidance due to the macro uncertainty.
"Is there going to be an issue around oil as inflation goes up? Will that drive people to spend a bit less? If they spend a bit less, it's not a direct impact on me, but a lot of consumer companies are my clients, like Walmart . If people are buying less at Walmart, they're going to find a way to control their costs, so then they'll buy less," he said.
Krishna noted that despite the Iran conflict, IBM's Middle East business did well.
The company reported first-quarter revenue of $15.92 billion, beating the $15.62 billion consensus estimate from LSEG. Earnings per share came in at an adjusted $1.91, 10 cents better than expectations. Software beat, with Red Hat growth rebounding to 10%.
Krishna said he is also cautious about growth concerns in Europe.
"That's the only place where I think there is some squinting because it is also a little bit of jadedness, right? You had the COVID shocks, you had the Ukraine war. So they've gone through these shocks a few times, and they actually come out okay. I think this time around is an open question," Krishna said.
"I don't think anyone will know the answer for another month or two," he added.