Wall Street Beat: Clouds loom for IT despite holiday break


An updated report on the U.S. economy in the third quarter, released this week by the Commerce Department, showed gross domestic product shrank at a 0.5 percent annual rate. That was worse than the 0.3 percent rate of decline first reported a month ago.

There were some signs of hope this week.

SAP co-CEO Leo Apotheker, when pressed last Friday at a New York conference about how the business climate has been, declined to provide specific guidance but allowed that "things haven't gotten worse" from last month. SAP caused a stir in the financial community when it scrapped its 2009 financial forecast a few weeks ago.

HP Monday said that revenue for its fourth fiscal quarter, ended Oct. 31, including gains from its acquisition of EDS, rose 19 percent to $33.6 billion, and that excluding special, one-time charges, earnings grew 13 percent to $2.6 billion.

Even this good news comes with caveats. Eliminating the effect of foreign exchange rates and excluding EDS from the results, a comparison to last year would have HP sales increasing by only about 2 percent. And Apotheker's vague comment may simply mean that things couldn't have gotten much worse.