What happened 

Shares of IBM (IBM -0.25%) were sliding today after the company reported its second-quarter financial results. Despite beating Wall Street's consensus estimates for both sales and earnings, investors were fleeing the stock after management cut its free-cash-flow (FCF) guidance for the year. 

The tech stock was down by 6.1% as of 11:16 a.m. ET on Tuesday.

So what

IBM reported adjusted earnings of $2.31 per share, up 43% from the year-ago quarter, and ahead of analysts' average estimate of $2.28. Sales also beat Wall Street's expectations, with revenue increasing 9% from a year ago to $15.5 billion, ahead of analysts' consensus estimate of $15.1 billion. 

A person looking at financial charts while using a computer.

Image source: Getty Images.

But investors shrugged off the company's solid second-quarter performance and instead fixed their attention on the fact that management lowered its full-year outlook for FCF. 

The company now expects $10 billion in consolidated FCF for 2022, down from its previous estimate of up to $10.5 billion for the year.

IBM's chief financial officer said on the company's earnings call that currency pressure is one reason for the downward FCF revision, along with exiting its Russia operation.

Now what 

Although IBM beat expectations in the quarter, investors are extra sensitive to any sign that a company's profits or FCF growth are slowing down, as they worry about rising inflation and the potential for the U.S. to enter a recession. 

And with investors still trying to gauge how the market will react to upcoming interest rate hikes by the Fed, it's likely that IBM's stock -- along with other tech stocks -- could continue to experience some significant price swings.