How Bad Are Tech Earnings?

Eric Savitz of Barron’s notes that “earnings season is off to a miserable start” as far as Tech is concerned. He gives 5 key reasons:

1. PC DEMAND IS SUFFERING big time. Microsoft and Intel are both cutting jobs;  Advanced Micro Devices (AMD) posted a 33% drop in profits; Disk-drive maker Seagate ‘s (STX) revenues were down 34%;  Logitech (LOGI), reported a March-quarter miss.

2. MOBILE-PHONE SALES are in trouble. Nokia (NOK) reported a 19.5% Q4 revenue decline; Warnings were already out from Motorola (MOT) and Sony Ericsson;

3. CONSUMER-ELECTRONICS demand is non-existent.  Sony (SNE) expects a loss for its March 2009 fiscal year. GPS device maker TomTom (TOM2.AE) issued an earnings warning; and Foxconn International (2038.HK)

4. THE CHIP BUSINESS CONTINUES to erode. Taiwan Semiconductor (TSM) reported a 31% Q4 earnings decline. MEMC Electronic Materials(WFR) sees March-quarter revenues down 50%; Marvell (MRVL) sharply reduced its Q4 guidance.

5. EVEN THE GOOD EARNINGS REPORTS aren’t so good.  IBM’s Q4 revenues actually missed by more than $1 billion, dropping 6%, and their full-year profits reflect cost cutting, not top-line growth. Apple (AAPL) exceeded both top line and perofit expectations, but iPhone sales disappointed, falling 36% from Q3; desktop Mac sales were weak, and Apple same-store sales were down from last year. Google (GOOG) beat estimates, but concerns as the ad market continues to soften.

You Knew Earnings Would Be Bad, but This Bad?

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