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.
- Aberdeen: Securing the Evolving Datacenter This report highlights ways security technologies and services are evolving to provide the visibility and control needed to deploy workloads flexibly in the...
- IDC MarketScape: Worldwide Client Virtualization Software 2013 Vendor Assessment IDC has placed Citrix in the 2013 IDC MarketScape Leaders Category once again noting that, "Citrix's position reflects the company's market leadership and...
- Infographic: Top Use Cases for Desktop Virtualization A wide range of business issues is driving IT toward desktop virtualization. One solution-Citrix XenDesktop with FlexCast technology-helps IT teams empower their entire...
- Budd Van Lines Moves Data Closer to Home Shipping and logistics company Budd Van Lines uses Infinio to improve performance on their VDI environment. The company employs a virtualized datacenter based...
- The Key to Happiness: Throw out Your Data Warehouse In this webinar, Kerry Reitnauer, Director, Solution Architect at FairPoint Communications will discuss the challenges the data warehouse brought, how they migrated to...
- Building Tomorrow's Data Center with Converged Technologies A number of forces are converging: the cloud, converged infrastructure, big data and fabric architectures to name a few. 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!