Wall Street beat: Recession whacks IT earnings

Though Google, IBM and Apple offered scraps of good news this week, for the most part earnings reports from companies including Nokia, Sony, AMD and Ericsson were grim, illustrating the extent of the global economic downturn and its impact on technology sales.

IT investors on Thursday got hit with a tsunami of earnings reports for the quarter ending in December. Google's report was by far the most uplifting.

Google reported sales for the quarter of US$4.22 billion, an increase of 24 percent from the same period a year earlier. The figure exceeded analysts' consensus forecast of $4.12 billion, according to Thomson Reuters.

Google's net income was $382 million, or $1.21 per share, well below the $1.2 billion, or $3.79 per share, it reported a year earlier. However, on a pro-forma basis excluding one-time charges, earnings were $5.10 a share, up from $4.43 in the year-earlier period and well above the $4.95 pro-forma earnings analysts had forecast.

Google's good news aside, perhaps the most unsettling thing for IT investors about this earnings season is how many companies say they have little or no visibility into how business will go over the next few quarters. Even the few companies with positive reports this week expressed caution about the next few quarters.

"It's unclear how long the global downturn will last, but our focus remains on the long term," Google CEO Eric Schmidt said in a statement.

Microsoft, which is so good about managing earnings expectations that it usually provides an upside surprise for market-watchers, on Thursday issued a quarterly report that missed analyst expectations. The company said it could not quantify earnings-per-share guidance for the rest of the year because of "the volatility of market conditions."

Microsoft reported that revenue rose 2 percent to $16.6 billion for the quarter ended in December, while net income fell 11 percent to $4.17 billion or $0.47 per share. Analysts had expected the company to post earnings per share of $0.49, on revenue of $17.08 billion, according to Thomson Reuters.

AMD also issued a report Thursday that fell short of forecasts. The chip company reported that quarterly revenue fell to $1.16 billion from $1.74 billion a year earlier. Analysts had expected revenue of $1.23 billion. AMD also reported a loss of $1.42 billion, better than the $1.77 billion loss a year earlier. But excluding one-time charges, the loss amounted to $0.69 per share, worse than analysts' forecast of $0.54 per share.

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