Tech Bellwethers: Earnings Scorecard

To get a measure of this earnings season, I've been keeping track of some of the tech bellwethers. There have been a few winners but, for the most part, the results aren't encouraging.

The following table is our tech scorecard for the week ending Jan 23, 2009. Three out of fourteen companies on our list of bellwethers have beat earnings expectations thus far in this earnings season.

Company	Earnings Results	Comments
IBM (IBM)	beat by $0.25	good guidance
Apple (AAPL)	beat by $0.32	conservative guidance (as usual)
Intel (INTC)	miss (rev -23%)	conservative guidance
eBay (EBAY)	profits down 31%	weak guidance
Nokia (NOK)	miss by $0.02	weak guidance
Sony (SNE)	miss, first annual loss in 14 years	guidance revised downward
Microsoft (MSFT)	missed by $0.02	announced layoffs, not providing guidance
Google (GOOG)	beats by $0.15	AdSense (30% of revenue) flat, $1B charge to write down AOL and Clearwire. Search ads, aggregate clicks doing well. Somewhat conservative guidance offered.
MEMC (WFR)	earnings down almost 80% from prior year	very weak guidance
Taiwan Semiconductor (TSM)	in line but down severely year-over-year	very weak guidance
Samsung	first ever quarterly loss	restructuring, expects loss next quarter
AMD (AMD)	miss by $0.14	weak guidance

It is true that earnings can be considered old news so I have provided a column that lists the outlook for each company based on management's forward guidance. It is rather distressing that guidance ranges from "conservative" to "very weak" with only IBM being fairly upbeat about the prospects for 2009.

We have only seen a couple of weeks of earnings so there is a possibility that others in the tech industry can do better. Still, given how many companies have announced layoffs and guided downward, I would not be too hopeful.

Disclosure: none

Comments

[awcabot:]

Apple pretty much always gives conservative guidance, and regularly beats it. The Trade RaD&R Operator ought to look at trends in guidance, compare to actual results, for this data to be meaningful.

Jan 24 07:35 AM

[gebby:]

but do stock prices reflect the worse? after earnings do stocks rally?

Jan 24 08:34 AM

[top_tier:]

What, you couldn't indicate Apple beat by .40? And you indicate numbers for the rest?

Jan 24 08:58 AM

[ArtfulDodger:]

This type of negative results generally occur toward the end of a downturn. Let's hope that's what this is.

Jan 24 09:11 AM

[boxerconan:]

You clearly omitted that AAPL beat by 28%.
Isn't it encouraging?
Plus AAPL showed over 40% of growth in non-GAAP base.
Looks like only negative results were emphasized.

Jan 24 11:54 AM

[Georgetastic:]

The point of the article is to highlight that the majority of tech bellwethers are showing poor results. AAPL and GOOG certainly did great, but they are only 2 of the 14. The implication is that at least 86% of the tech companies that have yet to release earnings will give poor results.


> You clearly omitted that AAPL beat by 28%.
> Isn't it encouraging?
> Plus AAPL showed over 40% of growth in non-GAAP base.
> Looks like only negative results were emphasized.

Jan 24 02:33 PM

[Trade Radar...:]

Most analysts are of the opinion that the great results from Apple and IBM were company specific, not indicative of the tech sector as a whole. I was looking to confirm this by maintaining a scorecard. As good as Google did, their rate of growth is clearly slowing and the Adsense issue is troubling.

Apologies for not including the numbers for Apple.

Jan 24 02:47 PM

[Fliujniligui:]

Getting conservative or weak guidance from a company I can buy at one fifth of 1 year ago price and which is debtless is a good thing for the bottom fisher I am.

Jan 24 05:05 PM

[relmor:]

Microsoft is hardly a bellweather company...There stock only moves when the main market has major moves. So throw that one out...
IBM rocked, GOOGLE considering did great, APple considering did OUTSTANDING, and Sony lost money because the Yen is too strong...Big deal...I see no evidence for a long recession from this information...I expect companies to adapt, take advantage of low material costs, and employee restructuring...Most will come out stronger...
American technology companies are the strongest in the world, and will always be...

Jan 25 11:46 PM

[Moon Kil Woong:]

Tech's results were clearly better than expected save maybe Intel. I think Intel is trying to TKO AMD again in the low end of the spectrum, so that's industry specific.

I still am of the mind Tech will suffer later 2009 because semis are showing weakness which will work its way down the line in a few months. Less semis mean less computer and server sales inevitably. It's best to look at leading indicators and the channel rather than analysts, especially when they are in bed with the companies helping to manage expectations.

Jan 26 06:51 AM