Wall Street Beat: Tech shares up for Q3, but face uncertainty
Tech companies end the quarter on a weak note
IDG News Service - Shares of technology companies finished up for the third quarter Friday, but face economic uncertainty for the rest of the year.
The Nasdaq Computer Index closed Friday at 1,675.51 compared to 1,580.13 at the end of June. However, they were down by 16.53 points for the day, amid reports of European protests over austerity measures and concerns about the impending "fiscal cliff" in the U.S. -- a series of drastic government cuts set to be enacted starting next year if Republicans and Democrats cannot reach a budget compromise.
Tech share losses outweighed gains Friday. For example Apple, which last week hit a record closing price of $702.10 over euphoria about the just-released iPhone 5, slipped by US$14.22 Friday to close at $667.10. Though iPhone sales of 5 million units broke records, analysts said that they missed forecasts, and worried that problems in the iOS 6 mapping function could be a sign that Apple's vaunted quality control is slipping a year after Steve Jobs' death.
Tech companies reporting quarterly financials this week offered mixed results.
Enterprise Linux vendor Red Hat Monday reported that sales for the quarter ended Aug. 31 rose 15 percent year-over-year to $322.6 million, as subscription revenue increased 17 percent. Enterprise software has been a bright spot this year as consumer PC sales have slumped. However, Red Hat's net income dropped year over year by $5 million to $35 million.
Company officials ascribed the income drop in part due to an increase in investments in the company's storage business as well as small technology acquisitions, but otherwise were upbeat.
"Our business model and offerings continue to appeal to customers despite the global economic malaise," said company CFO Charlie Peters.
Memory maker Micron Technology on Thursday said that for the quarter ending in August, its loss narrowed compared to the same quarter a year ago. The quarterly loss was $243 million compared to $320 million a year earlier.
Analysts stressed the positive. Micron "reported a better than feared AugQ in line with consensus," noted SterneAgee analyst Vijay Rakesh.
Though DRAM pricing has been weak recently, Micron has reported that memory inventories are much lower, suggesting that there will be some upward pressure on prices later this quarter, Rakesh noted.
Meanwhile demand for DRAM may surge. The average amount of DRAM in each smartphone shipped worldwide is expected to jump by nearly 50 percent this year, as they gain greater functionality, according to an IHS iSuppli report this week.
"As smartphones become more sophisticated, memory usage in the devices continues to rise -- not only to satisfy user wants and needs but also to accommodate demands made by ever-more powerful processors and increasingly refined LCD screens," said Clifford Leimbach, analyst for memory demand forecasting at IHS, in a report.
- Troubleshooting Common Issues in VoIP Learn more about Voice over Internet Protocol (VoIP), including common VoIP metrics used, best practices in VoIP management and tips and tricks for...
- IDG Research Survey: Are you Paying Too Much for Your NMS? Feel like you're paying too much for network monitoring? You're not alone. This survey brief summarizes findings from research recently fielded by IDG...
- 2013 Network Management Software (NMS) Buyers Guide This white paper contains an independent comparison study of six different network management solutions and provides guidance on how you can choose the...
- Rightsizing Your Network Performance Management Solution: 4 Case Studies This white paper discusses challenges encountered as organizations search for the most cost-effective network performance management solution.
- Tips to Simplify Database Administration and Development Make your job easier while getting the most from the leading productivity tool for database professionals. Learn tips from Dell Software's Oracle® ACE,...
- E-Signature RFP Checklist Webcast If your organization is looking to adopt e-signatures, you may be overwhelmed by the number of providers that offer seemingly similar solutions. How... All Data Center White Papers | Webcasts
Our new bimonthly Internet of Things newsletter helps you keep pace with the rapidly evolving technologies, trends and developments related to the IoT. Subscribe now and stay up to date!