Strong results from a clutch of technology heavyweights, led by top global chipmaker Intel Corp and “cloud computing” specialist VMware Inc, might give the battered US tech sector a boost.
International Business Machines Corp (IBM) also blew past Wall Street targets, raising its profit forecast and citing strong sales of mainframe computers and brisk business in emerging markets.
Those results set a brighter tone for a bedraggled tech -sector than recent analysis might have suggested. Still to report are heavyweights, from Cisco Systems Inc and Apple Inc to Hewlett-Packard Co.
Concerns that the growing popularity of Apple’s iPad is hurting personal computer sales, as well as the disruption to the global supply chain from Japan’s earthquake, had walloped bellwether tech stocks in recent weeks.
However, with Intel’s revenue forecasts for this quarter shattering expectations and defying fears of a slowdown in global PC sales, relieved investors piled back into the chipmaker’s shares and other possibly oversold stocks.
On Tuesday, Intel reported a 25 percent jump in first-quarter revenue to US$12.8 billion and forecast current-quarter revenue above Wall Street’s estimates. Analysts had expected first--quarter revenue of US$11.59 billion, according to Thomson Reuters I/B/E/S.
The company’s first-quarter net income was US$3.2 billion, up 29 percent from the same period one year ago. Earnings per share were US$0.56.
VMware, which specializes in helping corporations set up virtual computer hardware and software networks, also surprised Wall Street with evidence of a surge in corporations upgrading equipment as they emerged from recession.
The company reported profit excluding certain costs of US$0.48 a share. Sales rose 33 percent to US$843.7 million, the Palo Alto, California-based company said. Analysts on average estimated US$814.5 million.
IBM on Tuesday reported stronger-than-expected net income and revenue for the first quarter, helped by the weak US dollar and strong performance in the US and emerging markets.
The Armonk, New York-based company also raised its full-year forecast for operating earnings.
Net income rose 10 percent to US$2.86 billion, or US$2.31 per share. In the year-ago period, IBM earned US$2.6 billion, or US$1.97 per share. Excluding mostly -acquisition-related charges, earnings were US$2.41 per share, beating the average analyst estimate as polled by FactSet of US$2.29.
Revenue rose 8 percent to US$24.6 billion. Analysts expected US$24.02 billion. The increase would have been 5 percent at a constant currency, IBM said.
IBM said it expects full-year operating earnings of “at least” US$13.15 per share, up from an earlier forecast of US$13.
Earlier in the day, Asian -equities were on the upswing, with sentiment perked up by good company news out of the world’s No. 1 economy.
Japan’s Nikkei 225 climbed 1.8 percent to close at 9,606.82, South Korea’s Kospi added 2.2 percent to 2,169.91 and Hong Kong’s Hang Seng rose 1.6 percent to 23,896.10.
Australia’s S&P/ASX 200 gained 1.4 percent to 4,859. China’s Shanghai Composite Index rose 0.3 percent to 3,007.04. Benchmarks in Singapore, Taiwan and New Zealand also rose.
“It was all about earnings news overnight, with some very positive results significantly boosting overall sentiment,” Ben Potter of IG Markets in Melbourne said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts