- Sen. Rand Paul: ‘I am seriously thinking about’ running for president in 2016
- Sleet, ice, deepfreeze hit large swath of U.S.
- ‘Welcome to the edge of freedom’: Biden’s boots touch down in DMZ
- Obama: Hole U.S. ‘digging out of’ requires billions more in unemployment benefits
- Obama’s regulatory agenda will cost U.S. economy $143B next year: report
- Patriot Act author on James Clapper: Fire, prosecute him
- Russia P.M. Medvedev: No amnesty for political prisoners
- Michigan GOP Senate hopeful reminds government is the ‘servant’
- Christmas, by Congress: Members mull a 15-cent tax on trees
- U.S. unemployment falls to five-year low of 7 percent; 203K jobs added
Companies spending more on tech but still cautious
In Microsoft Corp.’s latest quarter, rising PC sales helped push net income up 35 percent, but investors were disappointed that business spending didn’t provide a bigger boost to the bottom line.
At that time, Microsoft CFO Peter Klein worked to rein in expectations for the pace of a recovery for software companies.
“If you think about what’s happened over the last year, the first thing that got hit and decreased earliest and fastest was hardware, and that’s what’s coming back first,” Klein said.
One Intel customer illustrating the technology-buying trend is Zach Nelson, CEO of NetSuite Inc., which sells “cloud computing” business software that’s delivered over the Internet.
NetSuite decided earlier this year to build a new data center in Boston with a couple hundred servers to accommodate its growing number of customers. It had postponed the decision a year waiting for the economy to improve, and was made this year with the reevaluation of the company’s technology budget, Nelson said.
Demand for such software is helping drive technology spending, in large part because companies such as NetSuite bear the cost of buying lots of servers to process data so their customers don’t have to.
“What you’re seeing in the Intel numbers in one way is the delayed impact of the recession causing this move by customers to the cloud,” Nelson said.
Despite Intel’s strong quarter, there’s still considerable worry that economic shakiness and austerity measures in Europe and fears about slowing demand in China will crimp growth.
Intel’s stock rose just 1.4 percent, or 30 cents, to $21.31 on Wednesday, and the Philadelphia Semiconductor Sector index, which comprises chip companies as well as manufacturers of chip-making equipment, fell 0.5 percent. Technology stocks overall were up, with the tech-heavy Nasdaq composite index rising 0.4 percent.
Chris Caso, a semiconductor analyst with Susquehanna Financial Group, said investors are having a “muted” reaction to Intel’s news because of uncertainty about the economy in the second half of the year and fears that Intel’s forecast may be too aggressive.
“What troubles people a little bit, and I’ll speak for our own research, generally people have picked up a more cautious approach from the PC supply chain in the past 2 months or so, and that didn’t seem to be reflected in Intel’s guidance,” Caso said. “That’s left investors a little uneasy.”
Intel says it is confident in its forecast. Intel CEO Paul Otellini acknowledged on a call with analysts that Intel’s business in China and Europe was slow to start the second quarter, but “settled down” by the end of the quarter and were “nicely up” in both regions.
AP Economics Writer Jeannine Aversa in Washington and AP Technology Writer Jessica Mintz in Seattle contributed to this story.
- Obama: Hole U.S. 'digging out of' requires billions more in unemployment benefits
- Bill OReilly reminds: Nelson Mandela was a communist
- Obama administration issues permits for wind farms to kill more eagles
- PRUDEN: British press horrified as London's new mayor dares to proclaim the truth
- Snow storm sucker punch: U.S. hit by winter wave
- Spike in battlefield deaths linked to restrictive rules of engagement
- Dick Cheney: Family feud over gay marriage has been 'dealt with'
- Craigslist killers: Police say newlyweds stabbed man for thrills
- Obama tries to calm Israeli fears over Iranian nuke deal 'not based on trust'
- Rush Limbaugh: Obama trying to make Mandela death about himself
Independent voices from the The Washington Times Communities
Get in the middle of all the action inside and outside the boxing ring.
Opinion, analysis, and musings on politics, pop culture, reinvention, and the resultant flotsam and jetsam floating around the right-of-center quadrant of the Left Coast.
The cold hard truth about politics in America today and the state of this once great nation.
Find the latest news and happening that effect those in the Washington D.C., Northern Virginia and Maryland Metro region.
White House pets gone wild!