International Business Machines Corp and Yahoo! Inc posted profit and sales that beat analysts' estimates, spurring optimism that other US technology companies reporting this month will follow suit.
Shares of IBM, the world's largest provider of computer services, and Yahoo, owner of the No. 2 US Internet search engine, rose in extended trading after the results. IBM said demand for computer services and software helped drive a 12 percent rise in net income. Sales of online advertising helped Yahoo produce a fivefold profit climb.
PHOTO: AP
"They are a powerful, positive statement on the state of tech" and spending on information technology, or IT, said Rob Enderle, an analyst at the Enderle Group in San Jose, California.
"IBM is showcasing the fact that IT dollars are coming back."
Gains at IBM, the second-largest technology stock in the world behind Microsoft Corp, and Yahoo indicate that companies remain willing to spend on technology-related products, services and advertising. Intel Corp on Jan. 11 said sales this quarter may exceed analysts' estimates. The three are among the first to report earnings for the final quarter of 2004. Microsoft reports next week.
"I'm optimistic," said Rudy Grimm, who helps manage US$4 billion for Berkeley Capital Management in San Francisco. He owns semiconductor stocks such as Analog Devices Inc and Maxim Integrated Products Inc. "Capital spending looks pretty good, and technology companies are the primary beneficiary of that." Armonk, New York-based IBM late yesterday said net income rose to US$3.04 billion, or US$1.81 a share, from US$2.71 billion, or US$1.56, a year earlier.
That beat the average estimate of US$1.76 a share by 20 analysts polled by Thomson Financial.
Yahoo, based in Sunnyvale, California, said net income rose to US$372.5 million, or US$0.25 a share, from US$75 million, or US$0.5, a year earlier. Profit excluding gains from a sale of Google Inc shares was US$0.13, beating analysts' estimates of US$0.11.
"The numbers were reasonable, so the market should look favorably on this," said Jim Grossman, who owns IBM shares among the US$62 billion under management at Thrivent Financial in Appleton, Wisconsin.
Microsoft, the No. 1 software maker, reports its fiscal second-quarter results on Jan. 27. Microsoft is expected to report profit of US$0.33 a share, the average estimate of 26 analysts in a Thomson Financial survey, on sales of US$10.6 billion.
Intel, the largest maker of chips that power computers, said its sales exceeded US$9 billion for the first time in the fourth quarter and forecast first-quarter sales that topped analysts' estimates.
Some analysts weren't all that optimistic.
"It's going to be a choppy earnings season for the technology stocks," said James O'Mealia, the president of Sunnymeath Asset Management, based in Sea Bright, New Jersey. He has about US$25 million under management.
Motorola Inc, the second-largest mobile-phone maker, reported fourth-quarter earnings that beat estimates. The company also said sales and profit this quarter may fall short of expectations. Motorola shares fell US$0.53, or 3 percent, to US$16.90 in extended trading.
IBM's results might also be a sign of better-than-expected earnings from companies such as Symnatec Corp.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2