Wall Street Beat: Earnings help boost tech as Dow closes above 14,000

EMC, Lenovo and NetSuite all post solid sales results, though BlackBerry, Apple and Facebook face investor skepticism

Despite some caution about the fortunes of BlackBerry, Facebook and Apple, solid financial results from tech vendors coupled with positive reports about the economy are boosting confidence in IT, with share prices of computer, consumer electronics and Internet companies rising this week.

A rising tide seems to be lifting most, though not all, boats in the tech sector. The Nasdaq computer index closed Friday at 1586.15, up by more than 18 points, as all major U.S. exchanges rose on upbeat economic data. U.S. employers added 157,000 jobs in January, and added an average of 181,000 jobs a month during 2012, according to updated figures released Friday by the Labor Department. The revised figure is better than the 153,000 jobs added per month that was previously reported.

The new figures fueled gains Friday for all major U.S. exchanges and indexes, after the Dow Jones Industrial Average and the Standard & Poor's 500 indexes had their best January since the 1990s. The Dow Jones Industrial Average closed at 14,009.79 Friday, which was the first time it topped 14,000 since 2007. Good sales numbers from major IT vendors over the past few weeks have played a big part in the general optimism. On Friday shares of tech industry heavyweights including IBM, Intel, Microsoft, Oracle, EMC and Google all closed up.

Despite the general optimism, the newly rechristened BlackBerry, which shed its former brand name Research In Motion Wednesday when it launched its new BlackBerry 10 products, has been running into headwinds. The two new devices debuting at the New York event -- the touchscreen BlackBerry Z10 and a handset with a physical keyboard, the BlackBerry Q10 -- were designed essentially from scratch around a new platform based on QNX, an operating system the company acquired in 2010. Though analysts applauded the overhauled BlackBerry 10 platform interface, the company's March launch date for the U.S. disappointed.

"The March date for the US launch is a bad surprise -- announcing a device over a month before launch is never great," said Jan Dawson, chief telecom analyst at Ovum. BlackBerry shares dropped by US$1.88 to $13.78 Wednesday and declined again Thursday before rising with the rest of the market Friday.

Caution also greeted Facebook's earnings announcement Wednesday, even though the social networking company reported a 40 percent year-over- year jump in fourth-quarter revenue, to $1.59 billion. Facebook also posted its first quarterly profit ever, generating net income of $64 million for the quarter. But expenses also rose significantly, causing investors to balk. Facebook shares slumped $0.26 to $30.98 Thursday and continued to decline Friday, to $29.73

Apple also can't seem to catch a break. Shares closed down at $453.62 Friday, well below the company's 52-week high of $705.07. Though the company last week posted an increase in revenue in the fourth quarter, profits were flat as it faced increasing competition from Android-based mobile devices.

The share slump Friday came even after Strategy Analytics reported earlier in the day that Apple outsold Samsung Electronics to become the number-one mobile phone vendor in the U.S. for the first time ever during the fourth quarter.

The good news for the market in general was that mobile phone shipments rose 4 percent annually to reach 52 million units in the U.S. during the fourth quarter of 2012, according to Strategy Analytics.

"The growth was driven by robust demand among consumers for 4G smartphones and 3G feature phones," said Neil Shah, senior analyst at Strategy Analytics, in the report.

Otherwise, tech earnings news this week was good. Enterprise software vendor earnings, for example, showed a healthy market for business applications.

Cloud-based business application vendor NetSuite said Thursday that revenue for the fourth quarter of 2012 was $85 million, a 33 percent increase over the prior year. Total revenue for the year was $308.8 million, a year-over-year increase of 31 percent.

Storage vendor EMC reported that it experienced a fourth-quarter revenue jump of 8 percent, fueled by solid gains at its VMware subsidiary, while profit rose 5 percent. Revenue was $6 billion for the fourth quarter, while net income hit $870 million.

On the hardware front, Lenovo Wednesday said quarterly profit skyrocketed 34 percent year over year to a company record of $205 million, as revenue rose by 12 percent to US$9.4 billion. Though PC sales are expected to grow slowly this year for the industry as a whole, Lenovo was helped by gains in its smartphone business in its home market of China.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags internetBlackberrybusiness issuesFacebookAppleemcfinancial resultsLenovoconsumer electronicsnetsuiteresearch in motionSamsung Electronics

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Marc Ferranti

IDG News Service
Show Comments

Cool Tech

Breitling Superocean Heritage Chronographe 44

Learn more >

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?