Wall Street Beat: Tech forecasts down amid market tumult

26.02.2009
Market analysts this week drastically cut estimates for global hardware and component revenue as concerns about the U.S.'s handling of the recession took a toll on investor confidence in vendors throughout the whole IT sector.

A series of tech sector-specific warnings Wednesday put pressure on company shares. IDC released a survey estimating that worldwide server revenue saw its biggest plunge in years in the last quarter of 2008. Server revenue declined 14 percent to US$13.5 billion, IDC said.

Meanwhile, Gartner said worldwide semiconductor revenue will drop this year by 24.1 percent, to $194.5 billion. Gartner's prior forecast called for a decline of 16 percent. After the 2001 recession, chip sales dropped 32.5 percent and took about four years to recover, noted Bryan Lewis, research vice president at Gartner.

The report came days after the U.S. unit of Qimonda AG, a bellwether memory chip maker, declared that it is seeking bankruptcy protection. The manufacturer said it did not expect operations to be interrupted because of the filing.

Dell, announcing its fourth-quarter results after the market closed Thursday, confirmed the downward trend in the hardware arena. It said profit plunged 48 percent to $351 million, or $0.18 per share. Excluding certain one-time items, Dell would have earned $0.29 cents per share, better than the $0.26 per-share forecast by analysts polled by Thomson Reuters. However, sales dropped 16 percent to $13.4 billion, missing expectations.