Intel and IBM Showing Positive Forecasts Despite Recent Economy Woes
Tech bellwethers Intel and IBM offered fresh evidence that the housing slump and financial malaise are separating the economy’s haves from its have-nots. Both companies—the haves, in this case—reported third-quarter gains Oct. 16 that exceeded analysts’ expectations in key ways. For Intel (INTC), the world’s largest maker of computer chips, profit and sales outstripped analysts’ expectations on robust demand for personal computers and the semiconductors that make them run.
At IBM (IBM), sales of computer services rose at the fastest pace in four years. It was enough to exceed the forecasts of some analysts, and more important, offset a drop in demand from some of the most notable have-nots: financial-services firms. IBM Chief Financial Officer Mark Loughridge told analysts on a conference call that U.S. banks and brokerages scaled back spending. That affected U.S. results especially in the area of mainframes, the hulking machines that help companies tackle mammoth data-processing tasks. “Given that the financial-services sector was uncharacteristically the poorest performing segment…and that they are big consumers of both mainframes and related software, there is at least a hint that the credit crunch may have affected the demand in the third quarter,” notes Bob Djurdjevic of Annex Research.
