A solid crop of earnings reports from the leading lights of technology suggests the sector is proving adept at cost cuts and more resilient to the economic meltdown than previously thought.
While executives from Apple Inc, Google Inc, IBM and Intel Corp were almost uniformly cautious in talking about the rest of the year, they all reported quarterly profits that beat Wall Street expectations.
Microsoft Corp's earnings on Thursday were in line with forecasts, but investors sent its shares higher in part because of cost cuts that the world's largest software maker is undertaking to protect its bottom line.
With corporate and consumer spending under pressure, analysts say many tech companies moved swiftly to slash jobs and output- positioning themselves for growth when a bottom is reached, which some say may have happened already.
"It does look like tech might very well lead us out of the recessionary market," said Enderle Group analyst Rob Enderle. "They are structured to respond more quickly and they've demonstrated they can."
Although the results were not necessarily strong on a historical basis and the outlook for the economy remains extremely uncertain, analysts see positive signs for the sector.
Technology shares have been surging, with the Morgan Stanley Hi-Tech index of major tech stocks up more than 30 per cent since early March.
While a rally may prove difficult to sustain, analysts say the prospects are better for an IT recovery because tech products and services are integral to the day-to-day functioning of the global economy and people's lives.
"Everybody's taking big cuts in their budgets, but a lot of tech spend is not so variable," said M Eric Johnson, director of the Center for Digital Strategies at the Tuck School of Business at Dartmouth. "A lot of their spending needs to and has to occur even in a downturn."
He said the recession in some ways has benefited information technology service providers like IBM, as corporations have moved to outsourcing.
IBM reported an 11 per cent drop in revenue, which was weaker than expected, but higher margins helped its profit beat analysts' forecasts.
There were other encouraging signals in major tech earnings reports. Apple's earnings topped Wall Street forecasts as consumers showed they were still willing to spend on premium devices such as iPhones and iPods even in a tough economy.
Google's and Intel's results also beat expectations, thanks to cost discipline. Intel Chief Executive Paul Otellini declared the worst is over for the PC market, a message echoed by disk drive maker Seagate Technology, but Microsoft Chief Financial Officer Chris Liddell said he saw no sign the bottom had been reached.
Positive signs also emerged from earnings reports from chipmaker Texas Instruments and flash memory maker SanDisk.
"Things at least seem to have stopped falling," said Barry Jaruzelski, a partner at consulting firm Booz & Co He said the key is in how enterprise IT spending plays out.
"It looks like we've found the reset level...The thing IT has going for it is it's often an enabler for cost reductions."
Agencies
Showing posts with label Intel Corp. Show all posts
Showing posts with label Intel Corp. Show all posts
Friday, April 24, 2009
Tuesday, April 21, 2009
Is HP top PC maker in US?
Global shipments of personal computers fell 7.1 percent in the first three months of the year, but the decline was smaller than expected and research group IDC on Wednesday said the industry could turn around by the end of the year.
A second research group, Gartner Inc, calculated first-quarter PC shipments fell 6.5 percent from the same period in 2008. The two groups use different methods to track PC shipments.
IDC had predicted worldwide shipments would fall 8.2 percent in the quarter. The US market was also much stronger than IDC forecast, with PC shipments falling 3.1 percent from a year ago, compared with an expected 8.9 percent drop. By Gartner's count, US shipments dipped less than one percent.
"Based on the U..being the center of the financial crisis, and looking at trends of last recession, we were concerned that demand and growth would continue to decline," said Loren Loverde, an IDC program director.
Instead, the US PC market, which took a beating in the fourth quarter, benefited from intense price competition among PC makers as well as the growing demand for netbooks, or small, cheap, low-powered laptops.
Both groups reported that Hewlett-Packard Co used the trend to overtake Dell Inc as the top PC maker in the US HP's lower prices and more established brand among shoppers helped push its market share to 27.6 percent. Dell's share fell to 26.3 percent as it struggled to reorganize its consumer business, according to IDC.
Taiwan's Acer Inc, the No 3 PC maker in the US and a force in the netbook market, snagged 10.5 percent of the market. Apple Inc's share edged up to 7.6 percent, and Japan-based Toshiba Corp, the fifth-largest, took 6.6 percent.
Worldwide, HP's market share crept up to 20.5 percent while Dell's slipped a few points to 13.6 percent, IDC reported. HP's shipments rose 2.9 percent as Dell's plunged 16.7 percent.
No 3 Acer captured 11.6 percent of PC shipments worldwide. China's Lenovo Group's share was flat at 7 percent, and Toshiba's share edged up to 5.4 percent.
Chipmaker Intel Corp. on Tuesday said personal computer sales "bottomed out" in the first quarter. Neither IDC nor Gartner wanted to match Intel's bold assessment, but IDC took a more optimistic stance.
"I don't think Intel's comment was meant to say we're going to come roaring back next quarter," Loverde said. "It's likely we won't see growth deteriorate from here."
Before the release of Wednesday's numbers, IDC had forecast an 8.4 percent decline in the second quarter and a 4.5 percent drop in the third before seeing growth in the fourth quarter.
George Shiffler, research director at Gartner, said in a statement that retailers may be restocking inventory, but "this restocking should not be interpreted as a recovery in PC end-user demand. It's still unclear if the global PC market has hit the bottom."
Agencies
A second research group, Gartner Inc, calculated first-quarter PC shipments fell 6.5 percent from the same period in 2008. The two groups use different methods to track PC shipments.
IDC had predicted worldwide shipments would fall 8.2 percent in the quarter. The US market was also much stronger than IDC forecast, with PC shipments falling 3.1 percent from a year ago, compared with an expected 8.9 percent drop. By Gartner's count, US shipments dipped less than one percent.
"Based on the U..being the center of the financial crisis, and looking at trends of last recession, we were concerned that demand and growth would continue to decline," said Loren Loverde, an IDC program director.
Instead, the US PC market, which took a beating in the fourth quarter, benefited from intense price competition among PC makers as well as the growing demand for netbooks, or small, cheap, low-powered laptops.
Both groups reported that Hewlett-Packard Co used the trend to overtake Dell Inc as the top PC maker in the US HP's lower prices and more established brand among shoppers helped push its market share to 27.6 percent. Dell's share fell to 26.3 percent as it struggled to reorganize its consumer business, according to IDC.
Taiwan's Acer Inc, the No 3 PC maker in the US and a force in the netbook market, snagged 10.5 percent of the market. Apple Inc's share edged up to 7.6 percent, and Japan-based Toshiba Corp, the fifth-largest, took 6.6 percent.
Worldwide, HP's market share crept up to 20.5 percent while Dell's slipped a few points to 13.6 percent, IDC reported. HP's shipments rose 2.9 percent as Dell's plunged 16.7 percent.
No 3 Acer captured 11.6 percent of PC shipments worldwide. China's Lenovo Group's share was flat at 7 percent, and Toshiba's share edged up to 5.4 percent.
Chipmaker Intel Corp. on Tuesday said personal computer sales "bottomed out" in the first quarter. Neither IDC nor Gartner wanted to match Intel's bold assessment, but IDC took a more optimistic stance.
"I don't think Intel's comment was meant to say we're going to come roaring back next quarter," Loverde said. "It's likely we won't see growth deteriorate from here."
Before the release of Wednesday's numbers, IDC had forecast an 8.4 percent decline in the second quarter and a 4.5 percent drop in the third before seeing growth in the fourth quarter.
George Shiffler, research director at Gartner, said in a statement that retailers may be restocking inventory, but "this restocking should not be interpreted as a recovery in PC end-user demand. It's still unclear if the global PC market has hit the bottom."
Agencies
Monday, February 9, 2009
Will Intel shift out 2,000 jobs out of Shanghai?
Intel Corp announced on Thursday a reorganization of its China operations that would close a Shanghai plant and eliminate 2,000 jobs, while affected workers would be offered positions in other parts of the country.
The news comes just days after the world's largest chipmaker said it would close plants in Malaysia, the Philippines and the U.S., cutting as many as 6,000 jobs as quarterly profit tumbled 90 percent.
"In order to optimize its manufacturing resources in China, Intel plans to consolidate Assembly and Test operations (ATM) from Pudong to Chengdu over the next 12 months," the company said in a statement.
Intel said it would provide the affected employees an option to work at the Chengdu facility in the west, or Dalian in the north, both more than 1,000 kilometres from Shanghai.
"The decision to relocate is up to the employees," said Nancy Zhang, an Intel spokesperson in Beijing. Zhang said she was not aware of any subsidies or other incentives that employees who choose to relocate would receive.
An Intel employee who attended the meeting in Shanghai where Brain Krzanich, president of Intel's Manufacturing and Supply Chain group, announced the job losses said workers were upset about the need to move to keep their jobs.
Intel said it was committed to China, nevertheless, and would increase its registered capital in Intel China Ltd., the company's investment holding company based in Shanghai, by $110 million.
Intel said the moves were necessary "as a result of the current economic conditions" and that its investment in the new $2.5 billion Dalian factory would be increased in order to insure that it has the latest advanced chip technology.
After Intel's assembly and test facility is closed in Shanghai, the eastern port city will still be home to an Intel research and development center and the firm's China headquarters.
Agencies
The news comes just days after the world's largest chipmaker said it would close plants in Malaysia, the Philippines and the U.S., cutting as many as 6,000 jobs as quarterly profit tumbled 90 percent.
"In order to optimize its manufacturing resources in China, Intel plans to consolidate Assembly and Test operations (ATM) from Pudong to Chengdu over the next 12 months," the company said in a statement.
Intel said it would provide the affected employees an option to work at the Chengdu facility in the west, or Dalian in the north, both more than 1,000 kilometres from Shanghai.
"The decision to relocate is up to the employees," said Nancy Zhang, an Intel spokesperson in Beijing. Zhang said she was not aware of any subsidies or other incentives that employees who choose to relocate would receive.
An Intel employee who attended the meeting in Shanghai where Brain Krzanich, president of Intel's Manufacturing and Supply Chain group, announced the job losses said workers were upset about the need to move to keep their jobs.
Intel said it was committed to China, nevertheless, and would increase its registered capital in Intel China Ltd., the company's investment holding company based in Shanghai, by $110 million.
Intel said the moves were necessary "as a result of the current economic conditions" and that its investment in the new $2.5 billion Dalian factory would be increased in order to insure that it has the latest advanced chip technology.
After Intel's assembly and test facility is closed in Shanghai, the eastern port city will still be home to an Intel research and development center and the firm's China headquarters.
Agencies
Saturday, January 10, 2009
Intel assures employees: No more job cuts
Intel Corp said job cuts it made three years ago should help it ride out the economic slowdown, indicating that Chief Executive Officer Paul Otellini won’t have to eliminate a significant number of workers.
“While we haven’t made specific projections on the size of the workforce, the restructuring we did in 2006 has put us in a good position to weather the current economic environment,” Intel spokesman Tom Beermann said today in an e-mailed statement.
Intel, the world’s top chipmaker, slashed jobs in 2006 and 2007 after losing market share to Advanced Micro Devices Inc. Those cuts helped set it apart from other technology companies, which are shedding workers now. Applied Materials Inc, National Semiconductor Corp and Sun Microsystems -- all based near Intel in Santa Clara, California -- have announced cutbacks.
“They are sufficiently profitable that even in a lousy economy they can hold on to people and sustain their new-market initiatives,” said David Wu, a San Francisco-based analyst for Global Crown Capital LLC. He has a neutral rating on the shares, which he doesn’t own. “The rich can afford to do things the poor cannot.”
Earlier this week, Intel said fourth-quarter sales dropped 23 percent, more than it projected, as the global recession stifled demand for personal computers. The company plans to give its full earnings report on Jan. 15.
Intel’s headcount
Intel had 83,500 employees at the end of the third quarter, down about 20,000 from its peak in 2006. When Otellini made those cuts, he said the company was too large for its revenue opportunities. That reduction helped profit rebound 38 percent in 2007, after a 42 percent decline in 2006.
The company will report a profit of $999.5 million for last quarter, according to a Bloomberg survey of analysts. That would be the first quarterly net income below $1 billion since 2003.
Intel fell 40 cents, or 2.8 percent, to $14.15 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares lost 45 percent of their value last year.
Job cuts might have hindered Intel’s efforts to expand into new areas, Wu said. The company announced an agreement this week to get its chips into television equipment from Toshiba Corp and Samsung Electronics Co.
“They are pretty committed to going into new markets, and they don’t want to have to say, ‘Oops, a recession. Everything stop,’” Wu said. “That wastes a lot of money.”
Agencies
“While we haven’t made specific projections on the size of the workforce, the restructuring we did in 2006 has put us in a good position to weather the current economic environment,” Intel spokesman Tom Beermann said today in an e-mailed statement.
Intel, the world’s top chipmaker, slashed jobs in 2006 and 2007 after losing market share to Advanced Micro Devices Inc. Those cuts helped set it apart from other technology companies, which are shedding workers now. Applied Materials Inc, National Semiconductor Corp and Sun Microsystems -- all based near Intel in Santa Clara, California -- have announced cutbacks.
“They are sufficiently profitable that even in a lousy economy they can hold on to people and sustain their new-market initiatives,” said David Wu, a San Francisco-based analyst for Global Crown Capital LLC. He has a neutral rating on the shares, which he doesn’t own. “The rich can afford to do things the poor cannot.”
Earlier this week, Intel said fourth-quarter sales dropped 23 percent, more than it projected, as the global recession stifled demand for personal computers. The company plans to give its full earnings report on Jan. 15.
Intel’s headcount
Intel had 83,500 employees at the end of the third quarter, down about 20,000 from its peak in 2006. When Otellini made those cuts, he said the company was too large for its revenue opportunities. That reduction helped profit rebound 38 percent in 2007, after a 42 percent decline in 2006.
The company will report a profit of $999.5 million for last quarter, according to a Bloomberg survey of analysts. That would be the first quarterly net income below $1 billion since 2003.
Intel fell 40 cents, or 2.8 percent, to $14.15 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares lost 45 percent of their value last year.
Job cuts might have hindered Intel’s efforts to expand into new areas, Wu said. The company announced an agreement this week to get its chips into television equipment from Toshiba Corp and Samsung Electronics Co.
“They are pretty committed to going into new markets, and they don’t want to have to say, ‘Oops, a recession. Everything stop,’” Wu said. “That wastes a lot of money.”
Agencies
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