First, it was Cisco (Nasdaq:CSCO), which despite announcing that its quarterly profit soared by 41 percent, set a cautious tone with a statement from its CEO and reported an increase in inventory. John Chambers made the following statement to analysts in a conference call:
"Most of the CEOs that I talk with view the economy as growing at a modest level and are a little more cautious ... than they were a quarter ago."
Then, it was Intel's (NYSE:INTC) turn to state higher inventory levels and see its stock dip below the $22 mark and be downgraded by brokerage firms like Lehman Brothers.
And today, the bearish high-tech trifecta was complete today with Hewlett Packard (NYSE:HPQ), reporting sales that were 39% below most analysts' estimates. CEO Carly Fiorina had to shuffle the deck, and lower the boom on execs in charge of server sales after disappointing results in that area.
Can all these results be indicative that the recovery that many were predicting might not be as strong as initially thought? Maybe so, according to a Business Week article. But on the same article, there is a valuable insight, courtesy of Juniper Networks' CEO Scott Kriens:
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Juniper Networks (JNPR) CEO Scott Kriens argues the technology recovery isn't stalling. Instead, he says, there's a new reality. "The tech recovery will be checkerboard," Kriens says. "It won't be marked by 'a rising tide lifts all boats.'" Discriminating tech buyers are most likely to consolidate their purchases around a handful of suppliers, leaving tech's also-rans in an increasingly precarious position. |
The road to this "checkerboard" recovery will be bumpy, as
it will be marked by mixed results. At least on the
positive side, Dell (Nasdaq:DELL) reported good results today, and IBM (NYSE:IBM) announced it will have to hire 8,800 more people in 2004 than it had previously expected, due to growth in its IBM Global Services business.