Wall Street Beat: Cisco, market reports cheer tech

Good news about the economy along with upbeat statements from industry leaders and market researchers are helping to instill confidence in the tech sector after a rollercoaster ride on U.S. exchanges over the past few weeks.

On Thursday the U.S. Department of Labor reported that the number of newly laid-off workers seeking unemployment benefits last week fell to its lowest point since January. Also on Thursday, a report from the International Council of Shopping Centers and Goldman Sachs said that the retail industry posted a 2.1 percent sales gain for October.

In an earnings conference call with analysts Wednesday, Cisco CEO John Chambers said an economic recovery "is well under way."

The positive outlook helped boost Cisco shares Thursday despite a quarterly sales decline to US$9 billion from $10.3 billion a year earlier and a dip in profit to $1.8 billion from $2.2 billion. Cisco was reporting first fiscal quarter results for the period ending on Oct. 24, and is one of the first major IT vendors to report results that include October. Among product highlights for the quarter was the expansion of Cisco's TelePresence line with the single-camera Cisco TelePresence System 1100 for multipurpose rooms, the company noted.

Though both profit and sales declined from 2008, they beat expectations by a wide margin, and the company is forecasting that year-over-year revenue will increase in the current quarter after a year of decline. The news drove Cisco shares up by $0.64 to close at $23.93 Thursday.

Chip maker Qualcomm, also reporting financial results Wednesday, offset a down quarter with news that it had signed a 15-year extension to a licensing agreement with Samsung, one of its biggest mobile-phone partners. The company said earnings for the quarter ending Sept. 27 were $803 million, compared to $878 million for the same period in 2008, while revenue declined to $2.7 billion from $3.3 billion.

However, the news about the Samsung deal, against the backdrop of the positive U.S. labor and retail reports, was enough to drive Qualcomm shares up by $2.25 Thursday, to close at $43.85.

Meanwhile, the Semiconductor Industry Association (SIA) Thursday released its annual forecast, projecting worldwide global sales of $219.7 billion for 2009, a decline of 11.6 percent from the $248.6 billion reported in 2008. The figure, however, is more optimistic than the 21 percent drop forecast six months ago.

The SIA also said that sales will increase by 10.2 percent to $242.1 billion in 2010 and by 8.4 percent to $262.3 billion in 2011.

Sign up for ITworld's Daily newsletter
Follow ITworld on Twitter @IT_world

• Email
• Print
• Share
  • Slashdot
  • Digg
  • Stumble
  • Reddit
  • Newsvine