Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: TigerPaw who wrote (34026)	1/2/2004 12:28:25 AM
From: stockman_scott	Respond to of 89467

What can investors expect in 2004? usatoday.com

To: TigerPaw who wrote (34026)	1/5/2004 12:53:44 AM
From: stockman_scott	Read Replies (4) \| Respond to of 89467

Here is an article from CNN/Money on the positive tech outlook for upcoming January earnings announcements as well as the 1st quarter. money.cnn.com <<Much to toast in tech Fourth-quarter earnings should be very strong and the first quarter won't be shabby either. January 2, 2004: 2:38 PM EST By Paul R. La Monica, CNN/Money senior writer NEW YORK (CNN/Money) - Tech bears may finally need to go into hibernation since it's getting tougher and tougher to ignore the obvious: Fundamentals for high-tech companies are stronger than they've been in years. Fourth quarter earnings season, which will kick off in earnest on Jan. 14 with reports from Intel (INTC: Research, Estimates), Yahoo! (YHOO: Research, Estimates) and Apple Computer (AAPL: Research, Estimates), should be extremely solid. According to Thomson First Call, earnings for the tech companies in the S&P 500 are expected to increase 29 percent from the fourth quarter of 2002. (This estimate excludes Lucent (LU: Research, Estimates), which skews results drastically since it is expected to post a loss of 1 cent a share compared to a loss of 11 cents per share in the fourth quarter of 2002.) Companies have given advance notice of good things to come: Nearly 40 percent of tech preannouncements for the fourth quarter have offered positive news, versus only 30 percent this time last year. Specifically, networking equipment and chip companies are expected to be among the strongest performers as firms bounce back from a dismal fourth quarter of 2002. Companies in the Dow Jones Communications Technology and Semiconductor indices are expected to post 240 percent and 285 percent increases in profits, respectively. It remains to be seen if the results will give a lift to those groups, or tech stocks in general, since techs were among the biggest gainers of 2003. The Philadelphia Semiconductor Index surged nearly 76 percent last year while the Amex Networking Index soared 92 percent. First quarter looking good Of course, investors will be more interested in hearing about what companies have to say regarding their outlook for 2004. And there is growing optimism about the first quarter. Earnings for the S&P 500 technology companies are expected to increase 38 percent (excluding Lucent) from the first quarter of 2003. It appears that concerns that strong demand for PCs, cell phones and other electronics devices in the fourth quarter would dry up in the early part of this year are for naught and that companies will not be left with a glut of high-tech gadgets. "So far there's very little evidence of excess inventory and 1Q 04 expectations seem reasonable to us relative to historical norms," wrote Pip Coburn, global technology strategist for UBS Warburg, in a recent report. What's more, revenue gains were tough to come by last year in tech but that appears to be changing. For the fourth quarter, sales for the S&P 500 tech companies are expected to rise 9.7 percent from the same period in 2002. And analysts are forecasting a 9.6 percent increase in revenues for the first quarter. The last time sales growth was this high for the tech sector was in the fourth quarter of 2000. Dell CEO Michael Dell, who has been among the more conservative tech executives, told a German newspaper earlier this week that corporations should increase tech spending in 2004. And Friday, CIO Magazine said in its latest IT spending survey results that executives expected to increase tech spending by 6 percent over the next 12 months. Is it sustainable? An increase in corporate tech spending could provide a big boost to sales and earnings since cost cutting and strong consumer spending drove much of the earnings growth in 2003. So if anything, first quarter earnings targets could wind up being too low. "The bear market has made analysts gun-shy about being aggressive on earnings estimates," said Todd Campbell, president of E.B. Capital Markets, an independent research firm. "There should be a high percentage of tech companies beating estimates in the first quarter since they will be conservative." Still, the war in Iraq last year will muddle comparisons somewhat. Last year at this time, several high profile tech companies were citing "geopolitical concerns" as a reason for weak sales and earnings growth. The outbreak of SARS caused some problems in the first and second quarters as well. So it might be prudent to wait and see how results for the second-half of 2004 look before declaring tech back for good. "The first two quarters of last year were OK but not stellar," said Ken Perkins, an analyst with Thomson First Call. "If we still have double digit increases in earnings during the third quarter, that would be good news." And of course, the big question facing investors is whether or not the market has already factored in this good news. The Nasdaq finished 2003 with a gain of 50 percent and expectations for this year are high. So while it's encouraging that earnings and sales growth appear to be back on track at last, investors just might be expecting a little too much from the tech sector in 2004. "Profits are on the rebound but is it sustainable? Given the extent of the previous bubble in tech, the recovery should be slower," Perkins said. "There's a whiff of a pickup in business spending but not enough to hang your hat on just yet.">>