Amongst all the doom and gloom I’ve felt like slitting my wrists at points over the last couple of weeks so it was good to hear the positive sentiment coming from Google, IBM and Nokia yesterday.
Google’s earnings fell short of expectations, but that was due to increased expenses and reduced investment income and is therefore not a reflection of the market conditions. Further, they were cautiously optimistic about the prospects for the next couple of quarters. So despite the earnings miss I take this as positive for Google and therefore as a good sign for our markets overall. The markets saw things differently and pushed Google 11% lower in after hours trading, but I’m with Yi-Wyn Yen of Techland who says investors are “freaking out for nothing”. Revenues are still 39% higher than Q2 2007 and 3% up on last quarter. The Google press release is here.
The stories at IBM and Nokia were more unequivocally positive with earnings per share up 13% and revenues up 4% year-on-year at the former and the latter came in ahead of estimates and increased its guidance for the remainder of the year. See Nokia’s sales buck fear of slowdown and IBM shrugs off global concerns.
However, the news isn’t all good with the word from Redmond less positive – Microsoft posts sharp profit rise, cautious guidance.
This doesn’t change overall macroeconomic picture – which IMHO is still very gloomy, but it does indicate that maybe the tech sector will be one of the better places to be over the next couple of years. This is in stark contrast to the 2001-02 recession where the bubble had been in tech and therefore tech was the worst hit.