MarketPR
IBM (IBM) is in focus after the company issued a second-quarter earnings warning that sent shares down 25% in a single session, the worst single-day decline on record for the stock.
The chief executive attributed the shortfall to weakness in the software and infrastructure business, explaining that clients shifted spending toward hardware purchases during the quarter.
The spending shift inside IBM's own customer base The CEO's explanation points to a demand rotation that took place within IBM's existing client relationships.
The problem for IBM is that software licenses and infrastructure contracts are the parts of its business that tend to renew and compound. Hardware orders do not carry the same forward revenue pull.
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