Wall Street Beat: IT crawls to end of a tough year


"Red Hat's low-cost, high-transaction business model continues its strong renewal performance," noted analyst Brent Thill in a Citigroup research note. Red Hat offers Linux services and an expanding portfolio of middleware software offerings.

Red Hat shares jumped by more than a dollar to close at $12.99 Tuesday, then drifted down during trading the rest of the week.

The news for hardware this week was, as usual, not promising. U.S. DRAM maker Micron Technology on Wednesday reported a decline for its most recent quarter. Micron reported a net loss of $706 million for the quarter ending Dec. 4, worse than the $262 million loss it posted a year earlier. Sales were $1.40 billion, down from $1.54 billion.

Micron blamed low prices for DRAM chips worldwide, which is not surprising. Hardware and components sales are expected to decline in 2009. Earlier this month, IDC said worldwide 2009 PC sales would decline by 5.3 percent, and last week it forecast mobile phone shipments to decline by more than 2 percent.

In IT, hardware and components are expected to take the brunt of the U.S. recession, since typically, hardware upgrades are the first thing cut when business budgets shrink.