Wall Street Beat: Tech earnings season could be stormy
Many forecasts indicate a soft quarter, as IBM, Intel, Google and Microsoft get ready to issue financial reports
IDG News Service - Get ready for a perfect storm of earnings news. With tech bellwethers including IBM, Microsoft, Intel and Google set to issue financial reports next week, earnings season will pick up in earnest and judging from recent forecasts and profit warnings, it could be a bumpy ride.
Both IDC and Gartner this week reported that fourth-quarter PC sales slipped from a year earlier. Though the software sector is widely expected to do better than hardware this year, a weak PC market affects not only chip makers like Intel, but software makers whose revenue depends to some degree on sales of applications on new PCs.
"While economic uncertainty in Western Europe had an effect on consumer PC shipments, expectations of a healthier economic outlook in North America could not stimulate consumer PC demand in that region," said Mikako Kitagawa, principal analyst at Gartner , in the company's report on quarterly PC sales Thursday. "The healthy professional PC market as well as growth in emerging markets could not compensate for the weaknesses in mature markets, with overall growth still negative."
Worldwide PC shipments totaled 92.2 million units in the fourth quarter of 2011, a 1.4 percent decline from the fourth quarter of 2010, according to Gartner.
On its part, IDC Wednesday also said that sales of personal computers slowed in the last three months of 2011, due to a weak economy, scarce hard drives as a results of flooding in Thailand and the competition from tablets. According to IDC's calculations, global PC shipments totaled 92.7 million in the fourth quarter of 2011, down 0.1 percent compared with the same quarter in 2010.
Intel in part blamed supply disruptions from the flooding in Thailand when it issued an earnings warning last month. The company forecast fourth-quarter sales of US$13.7 billion, plus or minus $300 million. Its previous estimate was for $14.7 billion, within a range of $500 million.
But earnings warnings have not been the sole province of hardware and components makers lately. Juniper Networks, for example, said Monday that its fourth quarter 2011 results will be softer than expected due to a weakening in demand for carrier routers. Juniper said revenue for the quarter is now expected to be in the range of $1.11 billion to $1.12 billion, compared to the company's previous forecast of $1.16 billion to $1.22 billion.
Philips Electronics also warned about weak fourth-quarter profits, in its case due to soft European consumer markets. The company, Europe's biggest consumer electronics maker, said earnings will decrease to about 500 million (US$638 million) from 910 million a year earlier.
"Our expected fourth-quarter financial results have been affected by the weakness in Europe, which has impacted our healthcare business, as well as pricing in our consumer lighting business," said CEO Frans van Houten.
- Best iPhone, iPad Business Apps for 2014
- 14 Tech Conventions You Should Attend in 2014
- 10 Desktop Apps to Power Your Windows PC
- How to Add New Job Skills Without Going Back to School
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- What Datapipe customers need to know about the new PCI DSS 3.0 compliance standard This handy quick reference outlines what PCI DSS 3.0 is, who needs to be compliant and how Alert Logic solutions address the new...
- The 12 PCI DSS 3.0 requirements addressed by Peer 1 Hosting This handy quick reference outlines the 12 PCI DSS 3.0 requirements, who needs to be compliant and how Alert Logic solutions address the...
- Defense Throughout the Vulnerability Life Cycle This whitepaper provides insight into how to leverage threat and log management technologies to protect your IT assets throughout their vulnerability life cycle.
- The Critical Role of Support in Your Enterprise Mobility Management Strategy Most business leaders underestimate the importance of tech support when they choose an EMM solution. Here's what to put on your checklist.
- Live Webcast Best Practices for the Hyperconverged Enterprise Network To the Age of Constant Connectivity and Information overload
- Live Webcast Unmasking the Differences between Consumer and Enterprise File Sync & Share The consumerization of IT combined with the rapid pace of the modern mobile workplace is forcing enterprise IT teams to evaluate file sync...
- Live Webcast Government Agency Webifies Outdated COBOL Applications Let this CTO tell you how his agency converted 1980s-era green screens into an e-filing portal for the 100,000 cases handled each year...
- The New Way to Work Knowledge Vault This Knowledge Vault focuses on how, in today's increasingly virtual world, it's more important than ever to engage deeply with employees, suppliers, partners,...
- Getting Ready for BlackBerry Enterprise Service 10.2 Find out how BlackBerry® Enterprise Service 10 helps organizations address the full spectrum of EMM challenges, while balancing the needs of both the... All Applications White Papers | Webcasts