IBM Flags Delayed Deals and Z Weakness in Preliminary Q2 Results

IBM disclosed preliminary second-quarter results on July 14, a week before its scheduled earnings call, saying delayed large customer deals and weaker-than-expected performance in its Z mainframe franchise left the company below its own expectations. The company reported revenue of $17.2 billion for the quarter ended June 30, up 1% from a year earlier, while its infrastructure segment declined 7%.

The early disclosure put unusual focus on the part of IBM’s portfolio tied to Z systems and their related software. Business Insider reported that IBM shares closed down 25% at $217.05 on July 14. IBM said its financial reporting remained in progress, meaning the figures are preliminary and final results may differ slightly when the company reports in full.

Infrastructure decline contrasts with software growth

In its letter to investors, IBM said preliminary software revenue rose 5% year over year. Consulting revenue was flat, or up 1% at constant currency. Infrastructure revenue…