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Wall Street Beat: Tech shares up as Internet stocks rise

Marc Ferranti | Aug. 5, 2013
The component forecast also looks good as smartphone sales boom.

The company reported that net profit was ¥3.5 billion (US$35 million) in the quarter, compared to losses of ¥24.6 billion in the same quarter last year, while revenue increased 13 percent to ¥1.7 trillion.

Sony's mobile products and communications business reported revenue of ¥389 billion, a 36 percent increase year over year, underscoring the importance of mobile communications to the future of just about any company in the consumer electronics business.

"Semiconductors for smartphones will see healthy revenue growth as demand for increased speeds and additional features continue to drive high-end smartphone demand in developed countries and low-cost smartphones in developing countries," said Nina Turner, research manager for semiconductors at IDC in a report this week. PC chip sales will remain weak, but as smartphone sales surge, semiconductor revenue worldwide will increase this year by 6.9 percent, reaching $320 billion, IDC said in the report.

Meanwhile, the wireless infrastructure segment of Alcatel-Lucent's business remained stable in the second quarter as the company continues efforts to focus on IP networking and ultra-broadband equipment. Revenue rose 1.9 percent to €3.61 million, driven by strong growth in sales of IP networking equipment, the company said. However, the company reported a net loss of €885 million (US$1.15 billion) for the quarter, weighed down by a charge of €552 million following a re-evaluation of assets, and restructuring charges of €194 million.

A strong week for tech stocks bodes well for confidence in the tech sector, as investors seem to be accentuating the positive aspects of what has been by most accounts a mixed quarter. But potential pitfalls remain.

Continued global macroeconomic uncertainty from a slowdown in China, the eurozone debt crisis and recession, Japan recession and the U.S. government spending cutbacks as a result of political compromise could all be factors weighing down IT, particularly spending that affects sales of components, IDC said in its report.

 

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