IBM lowered its full‑year 2026 revenue outlook to a 4%‑5% growth target in constant currency, down from the more than 5% projection it had set as recently as April. The company also reported second‑quarter earnings that missed analyst expectations, sending its shares sharply lower in extended trading.
The quarterly results versus LSEG consensus were:
- Adjusted earnings per share: $2.93 vs. $2.97 expected
- Revenue: $17.16 billion vs. $17.58 billion expected
Revenue grew 1% year over year to $17.16 billion, while net income slipped to $2.17 billion ($2.30 per share) from $2.19 billion ($2.36 per share) a year ago. IBM’s high‑margin software segment posted $7.76 billion in revenue, up 5%, whereas consulting revenue was flat at $5.33 billion. Infrastructure revenue fell 7% to $3.84 billion, driven by a 42% drop in Z‑mainframe sales.
In a letter to investors, CEO Arvind Krishna cited slower‑than‑planned sales of Z mainframe computers and transaction‑processing software as customers accelerated purchases ahead of expected price increases. The disappointing performance prompted analysts to downgrade their estimates, and IBM’s stock fell 25% in the latest session, marking its sharpest single‑day decline on record.
The figures disclosed on Wednesday were in line with the preliminary second‑quarter results released a week earlier. As of Wednesday’s close, IBM shares were down roughly 30% in 2026, while the S&P 500 rose about 10% over the same period.
IBM said it is pursuing several growth initiatives, including a letter of intent to build a U.S. quantum chip foundry and the launch of its new AI‑powered coding tool, Bob, which is already being used by more than 80,000 employees. “We are accelerating productivity by scaling software development leveraging AI, increasing the effectiveness of our sales and marketing organization, and optimizing our supply chain,” the company noted in its statement.
Executives are scheduled to discuss the results in a conference call with analysts at 5 p.m. ET.
WATCH: Melius’ Ben Reitzes on what’s next for IBM
Mandel And | Afp | Getty Images
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![Houthi Rebels Report Strikes on Two Saudi Oil Tankers in Red Sea</TITLE]Yemen’s Iran-aligned Houthi rebels have claimed responsibility for attacking two Saudi Arabian oil tankers navigating the Red Sea.Houthi military spokesperson Yahya Saree stated on Wednesday, “We targeted two Saudi oil tankers, named ENCELA and LAYLIA, for their violation of the blockade decision issued by the armed forces.”Saree noted that the operation utilized a combination of drones, cruise missiles, and ballistic missiles.While Saudi Arabia has yet to issue a formal response, the United Kingdom Maritime Trade Operations (UKMTO) confirmed receiving reports of a strike. According to the UKMTO, a vessel’s master reported being hit by an unidentified projectile, resulting in an onboard fire that the crew is currently working to extinguish.The escalation follows the Houthi movement’s decision on July 20 to impose a maritime blockade on Saudi Arabia. This move comes amidst heightened volatility in Yemen, following recent airstrikes by the Yemeni government on Sanaa Airport intended to intercept Iranian flights.Saudi Arabia has consistently denied Houthi allegations regarding a siege on the Yemeni population. Additionally, critics of the Houthi movement have highlighted their refusal to accept a Jordanian proposal to restore flight connections between Amman and Sanaa.As the US-Israel conflict with Iran has caused significant disruptions in the Strait of Hormuz, Saudi Arabia has sought to utilize alternative routes through the Red Sea and the Bab al-Mandeb Strait to maintain oil supplies. However, these routes are now facing direct threats from Houthi operations.The Houthi campaign against shipping in the Bab al-Mandeb Strait began in October 2023, following the start of the conflict in Gaza, and continued through the announcement of a Gaza ceasefire in October 2025.The Bab al-Mandeb Strait serves as a vital global maritime artery, linking the Red Sea to the Gulf of Aden. At its narrowest, the chokepoint is only 29km wide, restricting traffic to two channels for vessels moving toward or away from the Suez Canal.In 2024, approximately 4.1 billion barrels of crude and refined petroleum products—roughly five percent of the global supply—traversed this strait. Given the effective closure of the Strait of Hormuz due to the US-Israel war with Iran, any closure of the Bab al-Mandeb could potentially obstruct up to 25 percent of the world’s oil and gas supply.](https://i2.wp.com/www.aljazeera.com/wp-content/uploads/2026/07/ap_6a613e7ed9b96-1784757886.jpg?resize=1920%2C1440&w=1024&resize=1024,1024&ssl=1 "Houthi Rebels Report Strikes on Two Saudi Oil Tankers in Red Sea</TITLE]Yemen’s Iran-aligned Houthi rebels have claimed responsibility for attacking two Saudi Arabian oil tankers navigating the Red Sea.Houthi military spokesperson Yahya Saree stated on Wednesday, “We targeted two Saudi oil tankers, named ENCELA and LAYLIA, for their violation of the blockade decision issued by the armed forces.”Saree noted that the operation utilized a combination of drones, cruise missiles, and ballistic missiles.While Saudi Arabia has yet to issue a formal response, the United Kingdom Maritime Trade Operations (UKMTO) confirmed receiving reports of a strike. According to the UKMTO, a vessel’s master reported being hit by an unidentified projectile, resulting in an onboard fire that the crew is currently working to extinguish.The escalation follows the Houthi movement’s decision on July 20 to impose a maritime blockade on Saudi Arabia. This move comes amidst heightened volatility in Yemen, following recent airstrikes by the Yemeni government on Sanaa Airport intended to intercept Iranian flights.Saudi Arabia has consistently denied Houthi allegations regarding a siege on the Yemeni population. Additionally, critics of the Houthi movement have highlighted their refusal to accept a Jordanian proposal to restore flight connections between Amman and Sanaa.As the US-Israel conflict with Iran has caused significant disruptions in the Strait of Hormuz, Saudi Arabia has sought to utilize alternative routes through the Red Sea and the Bab al-Mandeb Strait to maintain oil supplies. However, these routes are now facing direct threats from Houthi operations.The Houthi campaign against shipping in the Bab al-Mandeb Strait began in October 2023, following the start of the conflict in Gaza, and continued through the announcement of a Gaza ceasefire in October 2025.The Bab al-Mandeb Strait serves as a vital global maritime artery, linking the Red Sea to the Gulf of Aden. At its narrowest, the chokepoint is only 29km wide, restricting traffic to two channels for vessels moving toward or away from the Suez Canal.In 2024, approximately 4.1 billion barrels of crude and refined petroleum products—roughly five percent of the global supply—traversed this strait. Given the effective closure of the Strait of Hormuz due to the US-Israel war with Iran, any closure of the Bab al-Mandeb could potentially obstruct up to 25 percent of the world’s oil and gas supply.")
