Hardware vendor results renew market confidence

Hardware vendor results renew market confidence

Hardware vendors Intel, Advanced Micro Devices (AMD), IBM and Apple Computer, have all reported strong second quarter financial results to June 2003, giving the hardware market some much needed confidence.

Chipmaker, Intel, reported a second quarter revenue rise of 8 per cent compared to the same time last year. It reported revenue of $US6.8 billion, compared with last year’s second quarter revenue of $US6.3 billion.

Intel competitor, AMD, reported increased revenue for the second quarter compared to last year, and forecast revenue growth for the third quarter.

Second quarter sales came in at $US645 million, up from $US600 million the year before, AMD said.

AMD stated that it had experienced weaker than expected sales into the channel in some markets due to the SARS crisis.

Apple Computer also achieved a successful half-year, increasing its third quarter revenue by 8 per cent. However, net income produced a disappointing result after it fell from $US32 million in Apple’s third quarter last year to $US19 in the third quarter this year.

Revenue rose to $US1.55 billion in the quarter ended June 28, as compared to revenue of $US1.43 billion in the third quarter of fiscal year 2002.

The company increased the number of Macintosh PCs and other hardware it shipped on a sequential basis, going from 711,000 units in the second quarter to 771,000 units in the third quarter. But it was the sales of iPods and other new revenue streams that fuelled most of Apple’s growth.

At IBM, revenue increased 10 per cent in its most recent quarter with growth in the company’s services and software units. However, its hardware business revenue declined 1 per cent, to $US6.6 billion. IBM’s Systems Group revenue from servers and storage systems increased 10 per cent but the company’s Personal Systems group revenue dropped 3 per cent as PC sales continued their down trend.

Revenue from IBM’s software unit rose to $US3.5 billion, up 6 per cent from last year’s $US3.3 billion. The company posted a net income of $US1.7 billion to June 30.

“We’re seeing very faint signs of a recovery,” an analyst with Deutsche Bank Securities, Ben Lynch, said.

An unscientific survey of resellers by Thomas Wiesel Partners this quarter showed an increase in the number of companies that expected spending to increase during the second half of the year, according to Eric Gomberg, senior research analyst for Thomas Wiesel.

Those resellers did not expect a return to the growth patterns of five years ago, but about two-thirds of respondents foresaw an uptick in technology spending in 2003, as opposed to one-third of respondents who felt that way last quarter, he said.

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