Publish date:

Tech Rebound? If Only, Sigh Executives

Investors should not confuse market stability with a return to the heady days of IT spending.



) -- This earnings season has certainly thrown up plenty of


results from tech firms desperate to see an end to the global economic slowdown, although it would be foolish to suggest that the sector is poised for a sudden rebound.

Despite recent Nasdaq





in the

chip market

and recent

bullish comments



(DELL) - Get Dell Technologies Inc Class C Report

CEO Michael Dell, it is way too early to call a tech





(INTC) - Get Intel Corporation (INTC) Report


Texas Instruments

(TXN) - Get Texas Instruments Incorporated Report

. Although the firm improved both sales and profitability during the second quarter, CFO Kevin March tempered his enthusiasm.

"Our belief is that we're probably nearing the bottom of this decline in the economy, but it will be difficult to see what will start the growth," he told

during a phone interview. "We're not saying that the economy is growing yet, because we don't see it."

March pointed to broader trends in the economy where

upbeat housing data

have been offset by the jobless rates.

"Look at the high unemployment levels -- there will be growth, but my concern is that it will be very, very slow," he said.

The U.S. unemployment rate reached 9.5% in June, its highest level since 1983, which hardly bodes well for sales of PCs and other consumer goods.


(MSFT) - Get Microsoft Corporation (MSFT) Report

, for example, recently suffered its first ever quarter of declining sales of its Windows operating systems, casting a long shadow over a tech sector





TheStreet Recommends



(IBM) - Get International Business Machines (IBM) Report



(GOOG) - Get Alphabet Inc. Class C Report


Even Michael Dell, who talked extensively about a rebound during the firm's recent analyst day, says that IT spending will not return until 2010. The CEO predicted that customers will refresh their storage and servers first, followed by client devices such as PCs.

Goldman Sachs analyst David Bailey expects demand for IT products to improve in late 2009 and early 2010, even in problem areas such as hardware, but he's hardly doing cartwheels. Microsoft's recent comments about a bottoming PC market have to be viewed against the backdrop of the broader economy, according to Bailey.

"The business environment is still tough and will likely continue to bottom out over the next quarter or two before turning up," he wrote, in a recent note.

Software specialist


(SY) - Get So-Young International, Inc. Sponsored ADR Class A Report

is another tech company unwilling to talk rebounds, despite enjoying double-digit sales growth during the second quarter.

"I have not seen any recovery," John Chen, the Sybase CEO, told

. "I do see the market stabilizing, but people are still looking for money."

Sybase, which competes with IBM, Microsoft, and


(ORCL) - Get Oracle Corporation Report

, is nonetheless gaining good momentum through partners such as



Research In Motion




(SAP) - Get SAP SE Sponsored ADR Report

-- which reports its second-quarter results later this week -- according to Chen.

However, the CEO is under no misconceptions about the scale of the economic downturn.

"This is an all-hands-on-deck environment," he said. "It does favor the larger company, so to speak, because the larger companies are more experienced in going through a downturn."

Networking specialist

F5 Networks

(FFIV) - Get F5 Networks, Inc. Report

is another tech company wrestling with the vagaries of the global economic slowdown, but still beat analysts' estimates in its third-quarter results last week.

F5 CEO John McAdam told

that this was very different to the prior quarter, when the company missed its own guidance.


quarter was much more predictable, more linear in nature," he said. "We're still being cautious, but it was a big improvement on the prior quarters -- in the telco and finance space, we're seeing more new data center builds starting to happen."

Ultimately, however, all the signs are pointing to it being 2010 before we see a real improvement in the tech sector.

-- Reported by James Rogers in New York