Dell's Solid Quarter: Weekly Tech Recap
NEW YORK (TheStreet) -- Hewlett-Packard (HPQ) - Get Report and Dell (DELL) - Get Report helped push stocks into positive territory late Friday, after Dell, the world's No. 2 PC maker, reported better-than-expected third-quarter earnings Thursday afternoon.
Sidestepping the down-sales woes that hit
Cisco
(CSCO) - Get Report
a week ago,
with 45 cents EPS vs. estimates of 32 cents a share and sales of $15.39 billion, up 19% from a year ago but below analysts' estimates of $15.74 billion.
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Investors didn't seem bothered by fourth-quarter guidance estimates, which Dell said will track slightly higher than the third quarter's, while analysts are expecting $16.28 billion. Dell shares surged in pre-market trading Friday almost 4% to $14.20, then rallied Friday.
The highlight of Dell's earnings was its gross margin, which came in at 19.2%, well above Wall Street's estimate of 17.5%. Dell attributed the growth to improvements in its supply chain, pricing discipline and reduced component costs.
Dell closed Friday up 23 cents, or 1.68%, at $13.90.
Now it's on to HP, which reports fiscal fourth-quarter results Monday after the bell. Analysts surveyed by Thomson Reuters are looking for revenue of $32.75 billion and earnings of $1.27 a share, compared to sales of $30.8 billion and earnings of $1.14 a share in the same period last year.
With Dell Thursday afternoon, chipmaker
Marvell
(MRVL) - Get Report
,
Salesforce.com
(CRM) - Get Report
and small business bellwether
Intuit
(INTU) - Get Report
reported earnings, too. All reported solid numbers, but it was Salesforce.com that saw the best investor reaction.
The CRM software maker said
year-over-year sales increased 30%
to $429 million while adjusted profit rose 12% to 32 cents a share (analysts were expecting 31 cents EPS on sales of $410.4 million). Shares soared immediately in after-hours trading, and on Friday afternoon,
Salesforce shares hit a new high
of $134.95; they're up more than 80% since the beginning of the year.
Intuit, which beat sales and profit expectations, saw its stock drop more than 7% Friday. Investors disliked the company's report of costs associated with two recent acquisitions; Intuit is predicting adjusted earnings of 36 cents to 40 cents a share for the next quarter, while analysts want to see 45 cents.
The stabilizing but still-hurting small business sector also weighed on the company; according to Intuit's monthly small business employment index, there's been a 2.7% annualized increase in small biz hiring. "That's a slight uptick ... Although
that rate won't get anyone out of the recession any time soon," said CEO Brad Smith on the conference call.
Intuit closed Friday down $3.27, or 6.78%, at $44.93, Salesforce closed up $20.97, or 18.11%, at $136.74.
The tech sector's consolidation streak continued on Monday, with
EMC's
(EMC)
deal to acquire Isilon (ISLN) for $2.25billion
, which prompted speculation
about the next big round of storage M&A.
EMC's stock closed up 31 cents, or 1.44%, at $21.82 on Friday.
Apple
made some noise Tuesday when it announced that
Beatles tunes are now available on iTunes.
Keeping the British band off the service was a trademark dispute between the California tech firm and the Beatles' former record label,
Apple Corps
, which was settled in 2007.
In separate news, the consumer tech giant is said to be
its carrier-agnostic iPhone SIM card strategy.
Overseas, Apple partner
China Unicom
, which has an exclusive deal to sell the iPhone in China, will
start selling its own smartphone, the UPhone,
later this year.
Apple shares closed down $1.70, or 0.55%, at $306.73 on Friday.
Sales of
Activision Blizzard's
(ATVI) - Get Report
Call of Duty: Black Ops
in its first five days of release, breaking movie, book and video game sales records.
Black Ops
shattered a record previously held by
Call of Duty: Modern Warfare
, which generated $550 million in its first five days of sales.
Despite the buzz, shares of Activision, which are up 1.54% for the week, fell 0.36% Friday to close at $11.68.
Cisco
(CSCO) - Get Report
, which recently sent shockwaves through the tech sector with its comments on IT spending, was also in the news this week, teaming with
VMware
(VMW) - Get Report
and
Citrix
(CTXS) - Get Report
to provide virtualization services on its forthcoming Cius business tablet.
Cisco shares ended flat on Friday, closing at $19.61.
--Written by James Rogers in New York.
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