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IDG News Service - While earnings from marquee-name tech companies such as Apple and Facebook disappointed this week, sales of mobile devices and enterprise software showed signs of growth.
The deluge of earnings reports offered mixed news about sales but followed a pattern that has become familiar. While the PC and components markets continue to face economic headwinds, smartphones, tablets and corporate software appear to be weathering the storm.
Half of the 175 board directors polled in The Gartner-Forbes 2012 Board of Directors Survey, released this week, said IT is their highest priority for investment in 2012, tied with investments in sales, even though more than half of the corporate executives said they were preparing for a market recession.
"You can't cut your way to greatness," said Gartner Vice Analyst Jorge Lopez in an interview. "There is a sense that businesses are more forward-looking now, that after the recession they cut as much as they could. We've seen a move toward shared services around HR, procurement, legal and finance, which liberated 15 percent to 30 percent of overall IT costs for new investments in areas of IT where companies feel they can get a competitive advantage."
SAP, the biggest ERP (enterprise-resource-planning) vendor in the world, reported on Tuesday that revenue for the second quarter increased 18 percent over the same quarter last year to AA!3.9 billion (US$4.9 billion), buoyed by record software revenue of more than AA!1 billion. Net profit was AA!661 million, up 12 percent from a year earlier. Sales were lifted by AA!85 million in business from its in-memory platform HANA in the quarter. The HANA platform will work with the company's core Business Suite ERP application modules by the end of this year.
SAP shares rose by $1.51 on Friday to end the week at $65.11.
NetSuite, an up-and-coming challenger to Salesforce.com in the cloud-based ERP software market, also offered an upbeat earnings report, announcing on Thursday that revenue for the second quarter was $74.7 million, up 29 percent year over year. Subscription and support revenue was $61.0 million, a 27 percent year-over-year increase. Excluding one-time charges, net income for the second quarter was $4.8 million, compared with net income of $1.6 million a year earlier.
NetSuite shares jumped $7.53 on Friday to close at $56.75.
On the smartphone front, Samsung Electronics reported on Friday that thanks in large part to its mobile phone business, quarterly profit skyrocketed 48 percent year over year to 5.19 trillion won (US$4.5 billion), while revenue was up 21 percent to 47.6 trillion won.
Samsung shipped 50.5 million smartphones in the quarter, more than double from a year earlier, compared with 26 million by Apple, according to a Strategy Analytics report Friday.
Apple itself on Tuesday reported that iPhone sales for the quarter ending in June increased by 28 percent year over year to 26 million units. IPad sales increased 84 percent year over year to 17 million units. Sales of Macs, however, increased only 2 percent year over year to 4 million. The results are in line with reports from other vendors this quarter that show tablets and mobile Internet-connected devices booming while PC sales stay flat.