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IDG News Service - The torrent of quarterly earnings reports continued this week, with major computer and telecom companies announcing sales and earnings that, for the most part, were well above the dismal results achieved a year ago during the depths of the recession.
Drilling down into some of the salient figures for key bellwethers reveals trends that should play out for the next few quarters. Though in many cases profit was up significantly, revenue was flat -- or at least, not greatly higher -- for some companies, so it is becoming clear that some sectors of tech and communications will emerge from the recession more quickly than others. Sales, or revenue, is arguably a better indicator of how far the sector has come since the recession, since profit numbers are being boosted by job cuts and restructuring implemented over the past year.
Because of the breadth of its software, hardware and service offerings, and the geographic scope of its business, IBM was one of the more important players reporting results this week. Starting what might be the busiest week of the quarter for tech investors and market watchers, IBM announced Monday that revenue for the first quarter rose 16 percent to US$22.9 billion and income increased 13 percent to $2.6 billion, compared to the year-earlier period.
While the increases may not sound as extraordinary, in terms of percent gain, as those from other major tech companies this week, IBM did not suffer as badly as other vendors during the recession because of its broad product range and global scope. It's easier for companies who were hit harder in 2009 to achieve big year-over-year gains, because the comparison being made is to a terrible quarter.
Nevertheless, IBM's report bodes well for tech in general, because it said it experienced growth across its various product lines and across geographies.
One of the stars of the week was, as usual, Apple. On Tuesday the company said iPhone and Mac shipments helped quarterly profit skyrocket by 90 percent to $3.07 billion, while revenue jumped 49 percent to $13.5 billion, compared to the same period in 2009.
The big news for the consumer and communications market was that iPhone shipments hit 8.75 million, up by a whopping 131 percent.
"We're thrilled to report our best non-holiday quarter ever," crowed Apple CEO Steve Jobs in the earnings announcement. Apple has continued to generate buzz lately because of continuing improvements to the iPhone and its new iPad tablet PC, which have had a so-called halo effect on sales of Macs.
Apple is a one-of-a-kind company. However, one thing is clear: The iPhone is setting the pace in the mobile market, and more and more people want high-end mobile devices. Apple sales of 8.75 million iPhones worldwide in the quarter, for example, handily beat analyst expectations.
Meanwhile, Nokia, whose strength is in the low end of the mobile device market, reported quarterly results Thursday that were lower than expectations, though better than last year's numbers. The company's income rose to €349 million (US$465 million), up from €122 million a year ago, while revenue grew by only 3 percent, to €9.5 billion.