Windows 7, the latest operating system from Microsoft (NASDAQ: MSFT), is expected to help jumpstart some IT spending. Intel (NASDAQ: INTC) also sees this happening. A new operating system often means a chance to upgrade from dated equipment that isn't worth upgrading, especially with favorable pricing for technology right now. Everything's coming together for a strong 2010 for the high-tech sector, so it's also worth watching Hewlett Packard (NYSE: HPQ), Dell (NASDAQ: DELL) and EMC (NYSE: EMC).
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FeedStars aligned for increase in IT spending
Dell sees IT spending ready to grow
Economic recovery starts on the ground. So, while it's nice to hear the likes of Stephen Schwarzman celebrate the return of IPOs and hefty exit strategies, the real indications that the economy is turning the corner will come when companies start to open their wallets and spend.
After dealing with only the have-to-haves for a while now, companies can start to make the improvements they've been putting off. Dell (NASDAQ: DELL) CEO Michael Dell sees this happening in the IT space, with companies expected to ramp up their hardware spending aggressively.
Inventories add pressure to Windows 7 release
Microsoft's (NASDAQ: MSFT) new operating system, Windows 7, is set to be released on October 22, 2009, but it's unlikely to have an impact on PC prices. So, if you're feeling the urge to rush out and buy a new box, try to hold out until the end of the month. You'll get a bit more life out of it.
Fortunately, PC prices aren't expected to get much lower, so the entire supply chain -- from chips to software -- has nowhere to go but up. The effect, though, has been to put some serious pressure on manufacturers and retailers to keep from screwing up the release.
Continue reading Inventories add pressure to Windows 7 release
Dell promotes Salesforce.com, eager for a taste of consulting cash
Salesforce.com (NYSE: CRM) has a new champion: Dell (NASDAQ: DELL). The PC manufacturer is promoting the online sales force-enablement platform as a way to gain access to the hefty sums available in the technology services business. The deal would give Salesforce.com access to Dell's clients in the small and medium-sized business categories. Dell would sell Salesforce.com products and provide consulting services to help clients integrate the solution with their other enterprise applications. The dollars and cents of this union weren't disclosed.
Dell sees the margins of the services business and wants a piece of the action, particularly since the PC sector is low margin. Also, sales have been hit pretty hard as a result of the financial crisis. With PCs accounting for 60% of Dell's top-line, a bit of diversity isn't a bad idea. Currently, services account for only around 10% of Dell's sales.
Continue reading Dell promotes Salesforce.com, eager for a taste of consulting cash
Infosys profits up 17%, long-term looks great
Infosys Technologies (NASDAQ: INFY) increased its first quarter profits by 17% by tapping new markets and wrangling in 27 new clients, according to the Financial Times. The second-largest software services exporter in India, Infosys even scored some major clients, such as Waitrose, a top-shelf food retailer in the United Kingdom. Tough economic conditions can tend to favor companies that provide outsourcing services -- as well as consulting services with high, easily justifiable returns on investments (ROIs).
Nonetheless, this is a competitive space, and Infosys did caution that IBM (NYSE: IBM), Accenture (NYSE: ACN) and Hewlett-Packard (NYSE: HPQ) will be formidable global foes. With the announcement, Infosys increased the lower end of its forecast for the year, expecting revenues to fall in the $4.45 billion to $4.52 billion range.
Continue reading Infosys profits up 17%, long-term looks great
Hewlett-Packard Q2 earnings preview
Hewlett-Packard Co. (NYSE: HPQ) will be reporting its second quarter results Tuesday afternoon. Will the world's largest computer manufacturer show strength in PC sales and market share gain in the laptop PC segment? We'll soon see.Corporate spending on IT equipment has remained soft in 2009, something that will possibly hamper HP's results. Although, International Business Machines Corp. (NYSE: IBM) saw a profit uptick in its latest quarterly report while revenue fell, and HP continues selling the bulk of the world's laptop PCs to this day.
Acer sees 31% profit slump as netbooks lead the way
Taiwan's Acer, which is the world's third-largest PC maker, said that its Q1 results included a 31% profit decline as the recession continued to hit PC sales and PC makers were taking advantage of selling more PCs at the same time.Continue reading Acer sees 31% profit slump as netbooks lead the way
What will move the Dow? A look inside the average
"What can get this market going again?" asks Chuck Carlson. In The DRIP Investor he says, "It's helpful to understand what stocks within the Dow need to do well for the index to do well."
"Not surprisingly, IBM (NYSE: IBM), the highest-priced stock in the Dow, carries the greatest weighting at more than 9% of the index. Obviously, with such a heavy weighting in the index, IBM will need to be a decent performer for the Dow to do well going forward.
"And when you total up the exposure of IBM with the other tech stocks in the Dow - Microsoft (NASDAQ: MSFT), Intel (NASDAQ: INTC), and Hewlett-Packard (NYSE: HPQ) - the total tech weighting in the Dow is 16%. Thus, tech stocks matter to the Dow, so it is diffcult to see the Dow sustaining a move upward without a nice rebound in the tech sector.
Continue reading What will move the Dow? A look inside the average
Circuit City impact will be deeply felt
We all know the impact that the current economic slowdown has had on Circuit City, but the question over what ultimate impact Circuit City's collapse will have on the economy will take a little longer to figure out. One thing is for sure, the company's collapse could not have come at a worse time for the overall economy.The first ripple that the market is going to feel is the vacancies that the company is going to leave in its wake after closing its doors. The company was operating 567 stores at the time it announced it was going under, and these stores represented a total square footage of 18.71 million square feet.
Laptop PCs outsell Desktop PCs for first time ever
We've all watched as laptop PCs sold like hotcakes over the last few years and gradually take market share from the desktop PC. Customers are finding out that the computing power they need is plentifully supplied by an all-in-one portable laptop and the cables, desk space and noise of a desktop PC simply isn't needed any longer.For the first time, laptop PC sales outranked desktop PC sales during last quarter. Brands like Hewlett-Packard Corp. (NYSE: HPQ), Dell, Inc. (NASDAQ: DELL), Apple, Inc. (NASDAQ: AAPL) and Taiwan's Acer sold an astounding 38.6 million portable PCs, compared with 38.5 million desktop units, according to research firm iSuppli.
HP continued dominating laptop PCs, with 18.8% of sales during the last quarter. Dell was quite a bit behind the leader with13.9% of sales. Acer took in 12.2% of sales. Although the desktop PC is far from dead, the consumer market is slowly abandoning them for cheap and powerful laptops as time goes by.
When is the last time you saw a perfectly-equipped laptop PC for under $600? Look in the ads from any Sunday newspaper -- they are there. And, customers are buying them like crazy.
The parade will go on, buy Macy's (M)!
Business is crummy, but at least the Macy's Thanksgiving Day Parade is a go. It's hard to believe, but the day of thanks is upon us. Despite the struggling economy, a near depression, and what is expected to be a long recession, we do have much to be thankful for.
What started as a pricking of the speculative bubble in housing became a wake up call for the dangers of too much debt. We are full bore in crisis mode and, yet, if you really look at it all, things are not that bad. Yes, your portfolio may be down 40% or more, but most of you still have jobs and interest rates are still very low. Bad as this has been, it could be much worse.
Despite the recent news that Hewlett-Packard (NYSE: HPQ) expects first-quarter profits, ending Jan. 31, 2009, to meet or beat current expectations, most companies dare not provide any guidance as the train wreck economy makes it difficult at best to predict sales and revenue.
That certainly is the case at Macy's (NYSE: M). Today, the large department store leader announced third-quarter profit ending Nov. 1 that missed expectations by a wide margin. Macy's lost $42.8 million, or 31 cents per share.
This should come as no surprise, but unfortunately analyst estimates were way off the mark. They were expecting a loss of three cents on higher revenue.
Going forward, the company is in self-preservation mode. Macy's is reducing capital expenditures to $75 million in fiscal 2009, down from the $125 budget for the current year.
The question for M is, can it survive a period of multiple quarters of losses? With $10 billion of debt on the balance sheet, the company has some serious issues to resolve in 2009.
Hewlett-Packard reports strong Q3 earnings on global shipments
Hewlett-Packard Corp. (NYSE: HPQ) reported very decent quarterly results Tuesday after the market close. The world's currently-largest PC maker reported a net profit gain of $2.03 billion, up from the year-ago period gain of $1.78 billion on the back of a $28 billion quarter in sales.The company's EPS was 86 cents, beating analyst estimates of 84 cents. In news that was not shocking, 68% of HP's sales were from overseas markets, although that was a drop of 2% from the Q2 period. HP, like many manufacturers, has its wings spread out so far in global markets that it was able to weather the U.S. market downturn.
HP guided its Q4 sales at over $30.2 billion, although CEO Mark Hurd indicated that his company's introduction of sleep laptop designs was making a splash worldwide. "You've got a lot of places around the planet where the only access to the digital content out there is through a notebook and a wireless card ... we have a significant opportunity.''
He's right. How many households are transforming to a multi-notebook, wireless environment without a desktop in sight? In addition to that, HP's global finesse and product mix is continuing to beat competitor Dell, Inc. (NASDAQ: DELL), even though Dell wants to change that.
HP overtakes IBM in global server sales in 1Q 2008
Hewlett-Packard Co. (NYSE: HPQ) has surged past IBM Corp. (NYSE: IBM) to become the world's largest seller of server computers, according to research firm Gartner released last week. It happened in the first quarter of 2008, where HP ended with nearly 30% of the server market ahead of IBM at just under 29% of the market.2007 was a triumphant year for HP in many ways, from personal computer market share to service revenue, but overtaking IBM by increasing its server market share by nearly 10% over the year-ago period was a nice ending to the tale. HP's Mark Hurd continues to best many rivals in the PC and server arenas. The real test will be to see if HP can really remain on top of the tech world. It's now above IBM in total annual sales, but staying there won't be easy.
HP's upped numbers were due to a "continued build-outs of large web data centers and emerging-market growth," according to Gartner. Gartner also noted that HP's push to market its blade servers and other products as energy efficient helped win marker share. Combine that with pricing and cost advantages over the competition and HP came out swinging in 2007 and into 2008 with a powerful punch not easily digested by its larger and smaller competitors. For example, smaller rival Dell, Inc. (NASDAQ: DELL) commanded only 12% of server sales in the first quarter.
Market highlights for next week: Lowe's, Hewlett-Packard reporting earnings
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Monday, May 19- Lowe's Companies (NYSE: LOW) to report Q1 earnings; conference call scheduled for 9:00am.
- Campbell Soup Company (NYSE: CPB) to report Q3 earnings; Conference call scheduled for 10:00am.
- Senate Judiciary Committee Hearing on Global Internet Freedom & Corporate Responsibilty at 10:00am. Appearing: Google, Inc. (NASDAQ: GOOG), Cisco Systems, Inc. (NASDAQ: CSCO) and Yahoo! Inc. (NASDAQ: YHOO).
- Medtronic, Inc. (NYSE: MDT) to report Q4 earnings; conference call scheduled for 8:00am.
- Hewlett-Packard Company (NYSE: HPQ) to report Q2 earnings; conference call scheduled for 5:00pm.
Continue reading Market highlights for next week: Lowe's, Hewlett-Packard reporting earnings
Analyst downgrades: SNN, BSY, JSAIY, BE, LHCG and EDS
MOST NOTEWORTHY: Smith & Nephew, British Sky Broadcasting and Electronic Data Systems were today's noteworthy downgrades:- Smith & Nephew (NYSE: SNN) was cut to Underweight from Neutral at JP Morgan, citing deteriorating fundamentals in several of SNN's key business lines.
- Goldman removed British Sky Broadcasting (NYSE: BSY) from its Conviction Buy List and said shares continue to trade at all-time low multiples and that the timing with Sky-Virgin dispute remains unclear. Shares remain Buy rated.
- Friedman Billings downgraded Electronic Data Systems (NYSE: EDS) to Market Perform from Outperform based on valuation following the Hewlett-Packard (NYSE: HPQ) news.
- Goldman downgraded J Sainsbury (OTC: JSAIY) to Neutral from Buy and removed shares from the Conviction Buy List.
- Goldman also removed Hewlett-Packard from its Conviction Buy List.
- Citigroup cut BearingPoint (NYSE: BE) to Hold from Buy.
- Wachovia downgraded LHC Group (NASDAQ: LHCG) to Market Perform from Outperform.
Ray of light: U.S. temp worker hiring increased by 34k in October
Closing Bell: Bulls gutting bears (ATVI, EWBC, GE, JASO, ENZN, MCD)
Goldman Sachs CEO Lloyd Blankfein pulls a Jeff Skilling in an interview
