IBM stock sinks as strong dollar and loss of business in Russia hit cash-flow forecast

• IBM fell Tuesday as a strong US dollar and the loss of the Russian market dented cash-flow projections.
• Shares were lower despite the company beating sales growth estimates.

IBM stock fell Tuesday as the company cut its forecast for free-cash flow on the loss of business in Russia and the strengthening US dollar.

Shares dropped more than 6% to $128.64 shortly after the opening bell. The company beat analysts estimates for sales growth in its second-quarter earnings report, and it remained adamant that demand strength hasn't faltered.

But the company conducts more than half of its business overseas, making the exit from Russia especially painful amid an already tumultuous period for markets as Wall Street seemingly prices in a recession next year and firms anticipate a slowdown in tech spending. Meanwhile, computer-maker and rival Apple said Monday it planned to slowdown hiring and spending next year, citing fears of a slowdown at one of the tech sector's most closely watched companies.

IBM exceeded Wall Street expectations on sales in the quarter, posting $15.5 billion against a forecast of 15.2 billion according to Bloomberg. The company also outperformed on earnings-per-share at $2.31 compared to an expected $2.27.

But the company said its free cash-flow forecast would register closer to $10 billion, a from the previously estimated range of $10 billion-$10.5 billion. IBM swiftly suspended operations in Russia in March once Western sanctions were imposed on the Kremlin in response to the country's invasion of Ukraine. IBM added that it expected current exchange rates to drag down its full-year force cast by six percentage points.

IBM chief executive Arvind Krishna has been pushing to steer the company toward a bigger market share of cloud computing in a hybrid model. IBM has acquired 25 companies meant to bulk up cloud computing operations under Krishna's leadership.