How Gadgets, Chips, Services Companies Are Faring

Companies providing gadgets, components, services and related software have begun releasing their earnings reports for the latest quarter. The reports come as consumers shift their spending toward phones and tablets and away from traditional PCs. Here’s a look at how selected companies are faring.

• April 5: Estimates from Samsung Electronics Co. show that operating profit for the first quarter grew 53 percent from a year earlier, to 8.7 trillion won ($7.7 billion), outpacing expectations for what’s normally a slow time for consumer electronics sales. Revenue grew 15 percent to 52 trillion won. Analysts say Samsung benefited from smartphone sales and shortages in memory chips for personal computers.
• April 10: Research firms IDC and Gartner release reports showing unprecedented declines in sales of desktop and laptop machines during the first three months of the year. IDC says first-quarter shipments of PCs fell 14 percent worldwide from a year earlier. That’s the deepest quarterly drop since the firm started tracking the industry in 1994. Gartner, Inc. pegged the first-quarter decline at 11 percent. IDC vice president Bob O’Donnell says Microsoft’s release of Windows 8 in October “not only didn’t provide a positive boost to the PC market, but appears to have slowed the market.”
• April 16: Intel Corp., the world’s largest maker of chips for PCs, remains steadfast amid the drastic slowdown in computer sales. It says it’s keeping its sales and margin forecasts for this year. The company is helped by rising shipments of chips for servers. Intel says it shipped 7 percent fewer PC chips compared with a year earlier, but 6 percent more server chips. Intel meets analyst forecasts for the just-ended quarter.
• April 18: Microsoft Corp. says revenue and net income surged in the latest quarter, but much of the gains were due to the recognition of sales that occurred before the launch of the latest versions of Windows and Office. Microsoft’s Windows division reports a 23 percent increase in revenue to $5.7 billion, but adjusting for the deferred revenue, revenue was flat.

IBM Corp. says first-quarter net income fell 1 percent due to delays in closing several large software and mainframe computer deals. IBM is seen as a good gauge of technology demand because it sells to major companies and governments around the world. That said, it’s not immune from economic uncertainty and currency fluctuations, which showed in the quarter’s results. IBM says weakness in the Japanese yen hurt the quarter’s results. A weak yen translates to fewer dollars for IBM on sales in Japan.

Nokia Corp.’s earnings report shows that it continues to take a hammering in the smartphone market, with revenue falling by 20 percent to 5.8 billion euros ($7.6 billion) in the first three months of the year. Mobile phone sales volumes fell across the globe — especially in China, which saw a 60 percent drop. The number of smartphones sold dropped 49 percent to 6.1 million units. Sales of other phones fell 21 percent to 55.8 million.

• April 23: Apple Inc. says it will distribute $100 billion in cash to its shareholders by the end of 2015. At the same time, the company says revenue for the current quarter could fall from the year before, which would be the first decline in many years. Apple CEO Tim Cook also suggests that the company won’t release any new products until the fall, contrary to expectations that there would be a new iPhone and new iPads out this summer. Apple shipped 37.4 million iPhones in the latest quarter, up 7 percent from a year ago. It shipped 19.5 million iPads, up 65 percent. Mac sales were flat at about 4 million.
• April 24: Chip maker Qualcomm, Inc. reports quarterly earnings and forecasts that fall in line with analyst estimates. But that disappoints investors spoiled by the company’s recent run of success as the growing popularity of smartphones fueled the demand for its mobile microprocessors. Although smartphone sales are still climbing, Qualcomm is now facing fiercer competition from other chip makers, including Intel, which has been redesigning its microprocessors in an attempt to grab a bigger piece of the mobile computing market.

Data storage equipment maker EMC Corp. reports a small decline in its first-quarter net income. The results fall short of Wall Street’s expectations, as the pace of its revenue growth continued to slow. CEO Joseph Tucci says EMC’s customers remain cautious about technology spending because of the “continuing tide of political and economic uncertainties.”

• April 26: Samsung says its first-quarter profit jumped to a record high as smartphone sales remained strong despite the April launch of an updated version of its flagship Galaxy phone. Sales of consumer electronics usually slow down in the quarter after the holiday shopping season, an effect that analysts thought would be compounded by people waiting for the release of the Galaxy S4. Samsung says sales of the older Galaxy S3 smartphone and the oversized handset called the Galaxy Note remained strong.

Coming up:

• May 2: HTC Corp.
• May 9: Sony Corp.
• May 21: Hewlett-Packard Co., Dell Inc.
• June 28: Research in Motion Ltd.