Wall Street Beat: Tech vendors issue upbeat sales reports

Revenue rises for HP, Dell, Nvidia and other vendors for 3-month period ending in January

Since the beginning of the year, doubts about economic recovery have sent markets on a roller-coaster ride, but the IT sector keeps plugging along, showing signs that it is becoming increasingly dynamic.

Hewlett-Packard, the biggest tech company in the world, on Wednesday joined other bellwether vendors such as Intel, IBM, Google and Microsoft that have recently announced strong quarterly earnings.

HP reported a 28 percent jump in profit compared to last year, to US$2.3 billion, for the quarter ending Jan. 31. It was the first major vendor to report results through the full month of January.

For bottom-line watchers who are worrying about the pace of economic recovery, HP's 8 percent revenue gain, to $31.2 billion, should have been the most important figure in the report. While profit can be boosted by cutting costs, companies increase revenue by selling more products and services, ultimately the real path to recovery.

HP's printer, industry-standard server and PC businesses all reported sales growth, though services revenue declined slightly.

Dell on Thursday reported a drop in profit during the fourth quarter of the company's 2010 fiscal year, which ended Jan. 29, but said strong sales of laptops and servers helped revenue increase from the year-earlier period. Revenue improved in all businesses, rising to $14.9 billion, compared to $13.4 billion a year earlier.

Investors will want to see the company's costs contained, because profit declined 5 percent to $334 million. The increase in sales is nevertheless another sign of recovery for the hardware market.

Strong PC sales also mean good news for the chip sector. Signs that the chip arena is coming back to life came from different vendors this week. Applied Materials, which makes equipment used to manufacture semiconductors, said profit was $83 million compared with a year-earlier loss of $133 million for the quarter ending Jan. 31. Sales jumped to $1.85 billion from $1.33 billion.

The company also said its revenue would rise more than 50 percent for the fiscal year ending in October, up from its prior growth forecast of greater than 30 percent.

In another good sign for chips and hardware, graphics processor maker Nvidia on Wednesday reported a fourth-quarter profit of $131.1 million, compared to a year-earlier loss. Revenue jumped more than 100 percent to $982.5 million.

The positive news this week went beyond the PC and chip sectors. Storage-equipment maker NetApp on Wednesday reported quarterly net income of $108 million, compared to a loss in the same period last year of $82 million. The company had revenue of $1.01 billion, up from $746 million in the year-earlier quarter.

Meanwhile, upbeat predictions for the mobile market came out of Mobile World Congress in Barcelona this week. The ITU issued a statement predicting strong global mobile cellular growth around the world. Mobile cellular subscriptions globally will rise from about 4.6 billion at the end of 2009 to 5 billion this year, the ITU forecast. Advanced services and handsets in developed countries and increasing use of mobile health services and mobile banking in the developing world will spur growth in the market, the ITU said.

"Even during an economic crisis, we have seen no drop in the demand for communications services," said ITU Secretary-General Hamadoun Touré at the conference. "I am confident that we will continue to see a rapid uptake in mobile cellular services in particular in 2010, with many more people using their phones to access the Internet."

Despite the generally upbeat financial reports from IT companies since the beginning of the year, the value of tech shares on the markets have whipsawed along with other sectors. Macroeconomic news indicating the general state of the recovery has trumped tech sector reports about rising sales.

On Thursday, for example, markets got what may be a short-lived reprieve, spiking on new data that show gains in the business activity index put out by the Philadelphia Federal Reserve, as well as a 10th straight monthly rise in the index of leading economic indicators issued by the Conference Board, an independent group of economists and analysts. The tech-heavy Nasdaq rose 15 points to close at 2241. However, that's still below the 52-week high of 2320 the exchange hit a month ago, and U.S. exchanges -- including the Nasdaq -- started to decline again in Friday morning trading, on news that the U.S. Federal Reserve is hiking its discount rate for lending to banks.

The overriding economic issues recently have centered around the frail jobs market and continued home mortgage defaults.

For confidence in IT to grow, strong tech vendor sales need to be accompanied by solid signs of expansion in the larger economy.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags HPDellMobile World Congressnvidia

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Marc Ferranti

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?