How chips, PCs, services companies are faring

AP News
Posted: Oct 22, 2012 5:56 PM
How chips, PCs, services companies are faring

Companies providing computers, components, services and related software have begun releasing their earnings reports for the latest quarter. The reports come as consumers shift their spending toward tablets and a weak global economy curbs corporate spending on computers. Here's a look at how selected companies are faring.

— Oct. 10: Research firms IDC and Gartner say worldwide shipments of PCs fell sharply in the third quarter, as some consumers spent their electronics dollars on smartphones and tablets and others held off for a new version of Windows. Gartner also estimates that Chinese PC maker Lenovo Group Ltd. outsold Hewlett-Packard Co. for the first time to become the world's largest seller of PCs. IDC still had HP on top.

— Oct. 16: Intel Corp., the world's largest chipmaker, says the usual bounce in sales due to the holiday season is likely to be cut in half this year, even though Microsoft is launching a new operating system that it says will get consumers excited about PCs again. In the quarter that just ended, Intel's revenue from PC chips fell 8 percent from a year ago, in line with reports from IDC and Gartner.

IBM Corp. says revenue slipped below Wall Street's expectations, much of it because of the economic deterioration in Europe and other parts of the world, which resulted in weakened international currencies and translated into fewer dollars on sales made abroad. IBM management also raised the specter of slowing demand for the company's technology-consulting services and business-software products as corporate customers become more cautious and debt-laden government agencies deal with budget cuts.

— Oct. 18: Microsoft Corp. says net income fell 22 percent in the latest quarter as it deferred revenue from the sale of its upcoming Windows 8 operating system to PC makers — and as PC sales in general took a dive. Excluding the deferrals, revenue for the Windows division fell 9 percent from a year ago, roughly in line with the decline in global PC shipments in the third quarter reported by research firms Gartner and IDC.

Chipmaker Advanced Micro Devices Inc. says it will cut nearly 1,800 jobs, about 15 percent of its workforce, by the end of the year in order to reduce spending in the face of dwindling sales. CEO Rory Read says trends that are reshaping the PC industry are happening faster than the company expected. The job cuts were announced as AMD reported that its revenue tumbled 25 percent in its just-ended quarter.

SanDisk Corp. reports lower net income and revenue for the third quarter as the company sold fewer of its memory chips to gadget makers. But the results surpassed Wall Street's expectations, and SanDisk says it is gaining market share from competitors.

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— Monday: Texas Instruments Inc. CEO Rich Templeton says the chipmaker executed well in the quarter "even though the economy and semiconductor market remained weak and likely will get weaker in the fourth quarter." Texas Instruments says it expects fourth-quarter earnings of 23 cents to 31 cents per share. That's below the 36 cents per share expected by analysts.

Hard drive maker Western Digital Corp. says first-quarter net income more than doubled from a year ago, helped by the March acquisition of a data storage subsidiary of Hitachi Ltd. CEO John Coyne says a weak economy is "dampening near term demand" but said he remains confident in the company's prospects over the long term.

Coming up:

— Tuesday: Xerox Corp.

— Wednesday: EMC Corp., SAP AG

— Thursday: Apple Inc.

— Friday: Samsung Electronics Co

— Oct. 30: Seagate Technology PLC

— Nov. 7: Qualcomm Inc.

— Nov. 20: Hewlett Packard Co., Dell. Inc., Inc.