IBM Lowers Annual Revenue Outlook Amid Mainframe Demand Decline
International Business Machines Corporation (NYSE:IBM) has revised its full-year revenue growth forecast downward to between 4% and 5%, down from a previous estimate of approximately 5%. The adjustment follows weaker-than-expected performance in data-centre mainframes, which saw sales drop by 42% year-over-year. Despite the decline, IBM remains confident in its long-term AI strategy and profitability. Second-quarter infrastructure revenue fell to $3.8 billion, a decrease of 7%, while overall quarterly revenue rose slightly by 1%. Free cash flow for Q2 was reported at $2.5 billion, down from last year's $2.8 billion. The company emphasized its focus on operational efficiency and portfolio strengthening amid the challenging market conditions. Chief Executive Arvind Krishna described IBM’s ongoing transformation as a 'structural shift' to meet evolving customer needs in AI adoption. CFO James Kavanaugh noted continued emphasis on productivity, despite revenue headwinds late in Q2.
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