Will Season Bring Chill to Tech?

A large number of tech giants have been ratcheting back guidance for the current quarter, but there are still some big names that may need to issue warnings in order to temper expectations for the next round of quarterly reporting.

As tough macroeconomic conditions have persisted -- and for many industries, worsened -- since technology companies last offered their projections in October, analysts have been trimming estimates for many tech companies, citing slower consumer and IT spending. Many now expect some companies to warn for the current quarter in early December or risk disappointing Wall Street when they next report in January.

Intel (INTC Quote), Cisco Systems (CSCO Quote), Qualcomm (QCOM Quote), Corning (GLW Quote) and Nokia (NOK Quote) have all come out in the last few days with warnings that the fourth quarter will be even worse than previous forecasts.

What's unclear is where that leaves other tech companies like eBay (EBAY Quote) or IBM (IBM Quote), many of which reported in the middle of October but haven't updated investors since.

A fraction of analysts have already started to cut their estimates, arguing that there will likely be no sustainable rally in tech stocks until these companies warn about the current quarter and offer conservative forecasts for 2009. Jeffrey Lindsay, analyst with Sanford Bernstein, says that it's hard to gauge what companies will actually say as their visibility isn't much clearer.

"We're at an unprecedented point right now where no one really knows anything," Lindsay says. "Nobody knows how the consumer is going to react. Nobody knows what's going to happen to the dollar. Unfortunately, with this level of uncertainty, companies will offer wide guidance again or they'll take the top end of guidance down a lot."