Earnings Paint Picture of Solidity

This column was originally published on RealMoney on Aug 9. at 2:30 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.

We've pretty much made it through yet another earnings season, and it's a good time to step back and evaluate the fundamentals. Simply put, the broader economy continues to proceed in a healthy growth cycle as sales and earnings growth in corporate America continue to be very strong. Looking at a cross-sampling of the biggest tech bellwethers answers all kinds of questions about the state of the economy.

Microsoft's(MSFT) sales rose nearly 10% year over year even as its Xbox and Windows platforms are both about to be upgraded, an event that normally freezes purchases as buyers choose to wait for the next generation.

Microsoft CFO Chris Liddell summarized the year succinctly on the company's last earnings call, saying, "2005 turned out to be a much better year than we expected." Intel(INTC), Advanced Micro Devices(AMD) and other companies that sell into the PC world also reported very strong growth numbers, and almost all of the calls discussed the steady demand and visibility of more steady demand into the end of the year.

So far, so good, no?

Nortel Networks(NT) (finally!) reported its most recent quarter's results on Monday, and the underlying growth story told in its numbers indicates similar positives in the fundamentals. Revenue rose 10% year over year, and gross margins were strong as demand for the company's wares is strong enough to keep competition from Lucent(LU), Siemens(SI) and others from bashing each other's businesses with cutthroat pricing, as we have seen when the broader economies and especially the teleconomy have turned south.