The invincible aura fades ICT markets
Investors should prepare for some of the biggest names in software and hardware in the U.S., Microsoft, IBM and Intel, when Big Tech began reporting quarterly earnings next week, analysts said. shares the trio are in the red July, following profit warnings in the last week of the little fellows, including Advanced Micro Devices, Applied Materials and Information. corporate IT budgets have historically proven to be more resistant to crisis as companies invest in the assumption that technology increases productivity and saves costs in the long term.
profit warnings may signal a broader retreat in orders, which means that the profit forecast of Wall Street seem far too optimistic for some outside experts. “I do not think the companies or the market anticipate the kind of slowdown as we will see in the second half of the year,” said Fred Hickey, editor of the Bulletin of High-Tech Strategy for investors. “Companies have not had the opportunity to adjust estimates however, they will. That will come,” said Hickey, who has followed the technology industry since the 1980s.
Samsung Electronics, a leading technology market in Asia for smart phones, televisions and memory chips, has forecast a quarterly profit record 5.9 billion (7.3 million) for April-June, but its stock has plummeted more than one fifth since May on concerns about demand for chips, televisions and appliances. From mid-June, analysts have reduced by more than a quarter of their earnings forecasts of LG Electronics, heavyweight South Korea other technology, according to Thomson Reuters Starmine SmartEstimates, which gives more weight to the estimates of analysts more accurate story. Shares of China’s Lenovo, worldwide PC manufacturer, behind Hewlett Packard, have withdrawn five months of declines. In Japan, shares in Sony and Panasonic are about three decades of minimal, while investors try to restore profitability in the current macroeconomic environment hostile and against stiff competition from South Korea and Taiwan.
The only bright spot is that Apple still has many fans on Wall Street. The manufacturer of the iPhone and the iPad is one of the few large high-tech stocks has gained 4 percent on July 1. Apple has beaten analysts’ forecasts of earnings in seven of the last eight quarters in at least 12 percent. Last quarter, profit was 22.5 percent above Wall Street estimates. Its performance has driven the entire sector, and analysts expect a new iPhone this year to maintain that growth. Apple is likely to report earnings of more than 1 percent above the average Wall Street forecast, according to StarMine SmartEstimates.
By contrast, Microsoft, which is preparing to launch Windows 8 operating system and its first Tablet PC, you can report income of 0.7 percent below average. Apple said the new iPhone will hit stores on 20 Chinese stores July. However, market watchers expect the general economic malaise comes to technology companies in the second half of the year. In the last three months, analysts have largely held its second quarter profit forecasts for technology and telecommunications companies. An IDC study of CIOs (CIOs) in about 250 U.S. companies conducted two weeks ago, estimated that they expected their budgets were reduced for the first time since early 2009. “There is a feeling among IT managers about what things have slowed down and it’s time to think of ways to cut,” said IDC analyst Stephen Minton.