GoKawiilIBM CEO Arvind Krishna attends a Rose Garden Club event on the Rose Garden of the White House in Washington on July 6, 2026.
IBM on Wednesday lowered its 2026 forecast and delivered thinner quarterly profits than analysts had projected, even after the technology vendor issued an earnings warning last week. Shares rose 1% in extended trading, as IBM said it aims to widen its full-year pre-tax margin by about 1 percentage point through higher productivity.
Here's how the company did relative to LSEG consensus:
Earnings per share: $2.93 adjusted vs. $2.97 expected
$2.93 adjusted vs. $2.97 expected Revenue: $17.16 billion vs. $17.58 billion expected
IBM's revenue grew 1% year over year in the quarter, according to a statement. Net income of $2.17 billion, or $2.30 per share, decreased from $2.19 billion, or $2.36 per share, a year ago. Adjusted earnings exclude acquisition-related adjustments.
Management called for 4% to 5% in constant-currency revenue growth for 2026. As recently as April, IBM had been looking for over 5% at constant currency. The company reiterated expectations for $1 billion in higher free cash flow for the year.
Analysts cut their estimates after IBM announced preliminary second-quarter results, a rare move in technology. In a letter to investors, CEO Arvind Krishna cited worse-than-planned performance in sales of Z mainframe computers and transaction processing software as organizations rushed to buy hardware ahead of expected price increases. The stock dropped 25%, marking its sharpest single-day decline on record.
The revenue and adjusted earnings per share figures IBM disclosed on Wednesday were in line with the figures released a week ago.