What Intel's Rockin' Quarter Means for the Rest of Tech
Telecom and computer companies have increasingly gained favor among analysts over the past three months, while the software and Internet sectors are not feeling a lot of love, according Thomson Reuters survey of analysts.
Networking giant Cisco Systems (CSCO), another tech bellwether, has seen its earnings per share (EPS) consensus estimate rise 7.9% over the past three months to 38 cents a share from 35 cents. The telecom equipment subsector, in which Cisco dominates, has seen its EPS average increase 1% during that same time period.
And in the computer hardware sector, analysts have pushed Apple's (AAPL) consensus estimates up by a whopping 38.7% to $2.42 per share from $1.74 per share over the past three months. The sector, meanwhile, has risen 4% during this period.
"I'm bullish on the [tech] sector and we have been at Seaport for many, many months," says Teddy Weisberg, a New York Stock Exchange floor trader with Seaport Securities. "It is the one sector that has really been able to show quarter-over-quarter growth in earnings and in revenue when the balance of the rest of the economy has basically been suffering.
The software sector and, more so, the Internet sector are expected to be in the suffering camp, however. These sectors, which are far less reliant on semiconductor chips, have seen analysts lower earnings estimates.
Microsoft (MSFT), for example, has posted a 4.6% drop in consensus earnings estimates during the past three months to 41 cents a share, down from 43 cents. The software sector has slipped an average of 1% in the period.
And while Internet behemoth Google (GOOG) has not noticed any change in analysts earnings estimates beyond its current $6.57 earnings per share, the Internet sector, however, has seen a 3% decline.
DailyFinance writer Sam Gustin contributed to this report.