Tech stocks were flat Friday afternoon after earnings announcements from IT vendors this week and a government economic report offered glimpses of good news, but not enough to dispel the pall that hangs over the technology market.
Apple, Facebook, SAP and other major vendors reported mixed third-quarter earnings this week. They followed a string of disappointing earnings announcements from other IT heavyweights this season including Microsoft, IBM and Intel.
In late Friday afternoon trading, The Nasdaq Computer Index gained 1.20 points to 1,569.17, about where it was a week earlier. While computer stocks are still up by 13 percent for the year, they were up by more than 25 percent for the year a little more than a month ago.
The U.S. Department of Commerce said Friday that the U.S. economy expanded at a 2 percent annual rate from July through September, up from a 1.3 percent rate in the prior quarter. But in the tech sector, PC sales are down from last year and large companies are showing some hesitation to expand IT purchases.
Many computer buyers last quarter held off purchases as they waited for a new generation of PCs based on Windows 8 to be released. Windows 8 was released Friday and a slew of products from hardware vendors are following.
Meanwhile, the so-called "fiscal cliff" -- a series of drastic U.S. budget cuts that will go into effect next year if a political compromise on taxes and spending is not worked out -- has appeared to make enterprises cautious about large-scale IT purchases.
The transition to Windows had an effect on Taiwan-based PC maker Acer, which this week said it managed to squeeze out a profit after a year-earlier loss. Sales slumped as it made the transition to a new line of laptops, tablets and all-in-one PCs based on Windows 8. Acer's net profit for the third quarter reached NT$68 million (US$2.3 million) up from a year-earlier loss of NT$1.1 billion. Revenue was down 11.4 percent year over year to NT$104.4 billion.
One good sign this week came from Samsung Electronics, which said Friday that third-quarter net profit jumped 91 percent to 6.56 trillion won (US$6 billion). Sales were up 26 percent year over year to 52.2 trillion won. The good results were attributed largely to healthy sales of its Galaxy S III phone and its Note line of tablets. The latest device, the Note 2, has garnered early praise and strong sales, analysts noted.
Apple results this week disappointed, even though the company had its best quarter ever for both sales and profit. Sales of iPhones and iPads fueled a 27 percent year-over-year jump in quarterly revenue, to $35.97 billion. Net profit came in at $8.2 billion, up from $6.6 billion. However, profit was below analyst expectations and the company's earnings guidance for this quarter also came up short compared to expectations.
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