Tech Data sales up, profits down
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There may be trouble ahead Technology distie Tech Data made sales of $5.4bn for the third quarter ended 31 October, an increase of seven per cent on the third quarter of fiscal 2006.â¦
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(InfoWorld) - With shares of major technology companies trading as high as they have ever done in the post dot-com era, IT investors this week are scrutinizing quarterly results from the world's biggest vendors to judge how the market will hold up for the rest of the year. Market analysis firms started off the year predicting an overall global annual IT spending increase of about 6.5 percent, so no one was expecting technology vendors to experience growth at the heady rates of the late 1990s. But even as competition squeezes profit margins, results overall point to a healthy 2007. In the hard-fought Internet services arena, product development and customer acquisition costs remain high, but Google continues to show skyrocketing growth. Thursday, it reported thatÂ second quarter net income rose 28 percentÂ from a year earlier to hit $925.1 million as revenue, minus traffic acquisition costs, surged by 63 percent to reach $2.72 billion, above the average forecast of $2.68 billion by analysts polled by Thomson Financial. In the chip sector, Intel reported Tuesday that even though gross margins on product sales shrank,Â profit for the second quarter increasedÂ 45 percent from last year to $1.3 billion. Company officials said that revenue for the third quarter would be $9.0 billion to $9.6 billion, beating its previous forecast. IBM also raised its earnings forecast for the rest of the year Wednesday and reported thatÂ second quarter results were its best in six years. Net profit was $2.3 billion, up 11.8 percent increase from a year earlier, on revenue of $23.8 billion, up 9 percent. In software, Microsoft was upbeat about its core business Thursday. Though it faces a mature market for its cash-cow products, it said sales of operating systems, server software and tools fueled a 7.3 percent rise in net income asÂ revenue rose 13 percent to $13.38 billion. Both profit and sales beat Wall Street estimates. However, companies like Motorola reminded investors that in an era of moderate growth, not everyone can win big. Two days after announcing it would restructure operations, the handset maker Thursday reported that disappointing sales of mobile devices led to aÂ second-quarter loss of $28 million, down from net income of $1.38 million a year earlier. Product design has become a crucial issue as the North American and European markets mature. Yahoo, meanwhile, suffered in the Internet services market,Â reporting Tuesday thatÂ net income for the quarter was $161 million, down from $164 million one year earlier. Yahoo also lowered its earnings guidance for the rest of the year. Despite disappointing results in some of the harder-fought areas of IT, overall earnings news and guidance for the rest of the year, coupled with the latest reports on customer spending, suggest that 2007 could end up being one of the brightest years in the wake of the dot-com bust. The tech-heavy Nasdaq stock market index hit six-and-half year highs this week and last, and customer spending seems to be exceeding forecasts. Results of the quarterly CIO Magazine Tech Poll published earlier this month, for example, indicate improved IT spending forecasts with respondents predicting increases of 7.2 percent over the next 12 months, versus estimates earlier this year of an average 5.1 percent increase.
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Oracle Corp.  on Monday posted a 21 percent rise in second-quarter profit, but sales of new software application licenses were weaker than Wall Street's forecast, sending its shares down 3 percent.
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Texas Instruments Inc  posted  on Monday lower quarterly profit and revenue as weak demand for  its calculators offset improving sales of advanced phones that  use its wireless chips.
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U.S. stocks fell on Thursday, led by a sharp decline in the tech sector as shares of online auctioneer eBay Inc.  and wireless technology company Qualcomm Inc.  took a beating a day after both companies reported disappointing outlooks.
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Computer Sciences Corp. , the fifth-largest U.S. technology services seller, posted quarterly revenue on Wednesday that missed Wall Street expectations, hit by a fall in U.S. commercial-sector sales.
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Electronic Data Systems Corp. , the world's second-largest technology services provider, on Monday posted a higher-than-expected quarterly profit thanks to cost cutting, but revenue fell and it forecast 2005 earnings would fall short of Wall Street estimates.
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Stocks edged higher on Thursday after data showed an unexpected rise in sales of new homes in September, while earnings from tech companies Motorola Inc  and EMC Corp  helped eased worries about third-quarter profits.
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U.S. technology stocks rose on  Wednesday as Cisco Systems'profit and outlook reinforced  optimism over earnings, while blue chips ended little changed  as an oil price drop weighed on energy shares.
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Lucent Technologies Inc.  on Wednesday posted lower quarterly earnings and disappointing sales despite improved demand for wireless network products, and the telecommunications gear maker's shares fell.
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TechWeb - The provider of on-demand enterprise-resource planning software has posted strong revenue growth, but until last year sales and marketing costs always exceeded revenue.
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The virtualization specialist reports a sharp rise in earnings, but its sales fall short of what some analysts had been expecting. Shares fell more than 25 percent in after-hours trading.
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NEW YORK - Stocks moved modestly higher Monday as investors discounted another technology profit warning and focused instead on positive outlooks for third- and fourth-quarter earnings.    While some investors were concerned that rising energy prices and the summer's economic slowdown would undermine third-quarter results for many companies, a new report by J.P...
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Net profits up, per share profits down, share count up.
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The profit report cards last week looked good both for the old-line stalwarts of the technology sector, but this is a technology recovery of seemingly diminished expectations.
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The company reported a sharp decline in its fourth-quarter profit compared with results a year ago that were fattened by a gain, but sales were up 1.7 percent.
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Texas Instruments Inc posted a higher  fourth-quarter profit and gave an outlook that reassured  investors who were worried the weak U.S. economy would hurt  demand for its wireless and analog chips.