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Local Tech Wire and From Wire Reports
RALEIGH, N.C. – Hewlett-Packard and Dell reported their fiscal first quarter numbers this week, showing a rebounding personal computer market, marked by strong consumer demand, and a big push in the corporate sector to replace aging machines.
The two PC giants are also seen riding a wave of stronger demand for servers, as the corporate technology market bounces back from the server slump that followed the economic downturn.
Forrester Research projects U.S. spending on information technology will rise 8.4% to $550 billion this year following an 8 percent decline in 2009. That marked the worst showing since the dot-com burst in 2001, which saw an 11 percent drop.
Here is a quick summary of earnings reports for selected technology companies for the first quarter, and what they reveal about the state of corporate spending in information technology.
April 13: Intel Corporation said net income nearly quadrupled, revenue up 44 percent. Intel says corporations are upgrading their employees’ computers and buying more servers.
April 15: Advanced Micro Devices showed a 34 percent increase in revenue and said spending on servers remained "pretty healthy." The microprocessor maker’s CEO said he is less certain about corporate spending on personal computers.
April 15: Google revenue surged 23 percent, its best rate since summer 2008. Prices paid for Google’s ads were 7 percent higher than the average rate at the same time last year.
April 19: IBM reported net income gain of 13 percent, revenue up 5 percent. Revenue would have been flat without currency fluctuations but the company predicts revenue will rise even without such adjustments in the current quarter.
April 20: Yahoo reported its first revenue growth in 18 months. Although total ad revenue increased just 3 percent, display advertising rose 20 percent. That category included online billboards that companies use to promote brands.
April 21: EMC reported net income up 92 percent and revenue up 23 percent. However, the company questioned whether the unusual spike in IT spending has already ended.
April 22: Microsoft’s net income in the last quarter rose 35 percent. It credits strong sales of the newly-released Windows 7. Although businesses have been spending more on new computers and some software, Microsoft said revenue for the group that makes server software rose only 2 percent.
April 23: Xerox said it lost money because of acquisition charges but that revenue from services and printer and copier supplies rose as corporate spending picked up.
April 26: Texas Instruments said its first quarter income leaped because of greater demand for cell phone chips and an overall rise in technology spending.
April 29: Motorola posted an unexpected profit in the first quarter, as sales of its new phones outdid its own forecasts. It also gave a brighter outlook than what Wall Street was predicting.
May 12: Cisco Systems reported a 63 percent rise in net income, as the economic recovery gave customers the confidence to spend on big-ticket networking gear.
May 18: HP’s net income jumped 28 percent and revenue rose 13 percent in the February-April period, both signs that increased demand for computers is helping heal a battered technology industry. The numbers beat Wall Street’s forecasts and HP raised its 2010 revenue and adjusted profit forecasts, sending its shares higher.
May 20: Dell’s first-quarter net income rose 52 percent, helped by sales of computers to businesses and technology services to public-sector customers. Dell reported its fiscal first-quarter results on Thursday, and the company’s revenue rose 21 percent to $14.9 billion, more than what analysts were expecting. Dell’s net income rose to $441 million, or 22 cents per share, from $290 million, or 15 cents per share in the same period last year.