IBM cuts full-year sales outlook after mainframe demand drops 42 percent in Q2

TL;DR

IBM lowered its revenue growth forecast to four to five percent after mainframe Z system sales fell 42 percent in the second quarter

IBM cut its full-year sales outlook on Wednesday after reporting a sharp drop in demand for its mainframe business, lowering its revenue growth target to four to five percent from a prior forecast of more than five percent. The company also trimmed its software unit guidance, with CFO Jim Kavanaugh telling Bloomberg that annual software sales will now grow six to eight percent. Kavanaugh said the reduction is tied entirely to weakness in IBM’s infrastructure unit and its associated software, and that the rest of the company is performing extremely well

Mainframe sales plummeted 42 percent in the second quarter ended June 30, reversing a run of strong growth since IBM launched its newest Z systems last year. The company had already flagged the weakness on...

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