Technology Sector Sees Encouraging Results from Wall Street Favorites

Strategic Insights -

The technology sector saw a turnaround in its fortunes yesterday as Motorola, EMC, and Sun Microsystems reported mostly encouraging results for the quarter. For Motorola, the third-largest maker of cellphones, the quarter brought surging earnings and market share gains, with the company's cellphone unit shipping 24.1 million phones, a 52 percent increase from the same period last year. EMC, the leader in the data storage industry, saw its net income jump to $192.8 million, or 8 cents a share, from $81.7 million, or 4 cents a share, in the second quarter of 2003. Sun Microsystems, which primarily makes server computers that run networks, reported unexpectedly strong sales for the quarter, the last in its fiscal year, ending a dismal three-year stretch in which every quarter's sales had been lower than the quarter the previous year.

Key Takeaways:

  • Motorola reported a net loss of $203 million, or 9 cents a share, for the quarter ended July 3, which included one-time tax losses and gains. However, absent such adjustments, Motorola earned 21 cents a share, exceeding analysts' expectations of 18 cents a share.
  • Revenue at Motorola rose 41 percent, to $8.7 billion, driven by the company's cellphone unit, which shipped 24.1 million phones, a 52 percent increase from the same period last year.
  • EMC's net income jumped to $192.8 million, or 8 cents a share, from $81.7 million, or 4 cents a share, in the second quarter of 2003, with revenue rising 33 percent to $1.97 billion.
  • Sun Microsystems reported unexpectedly strong sales for the quarter, with revenue of $3.11 billion, up 4.3 percent from the same period last year, and losing $169 million in the quarter, or 5 cents a share.
  • Motorola's Freescale Semiconductor unit, which will remain a subsidiary of Motorola until the rest of its shares are transferred to Motorola shareholders later this year, reported sales of $1.46 billion, a 31 percent increase from the same period last year.
  • EMC's software revenues were up 64 percent from a year ago, while services revenues rose 45 percent, with the company reporting that it is growing at least two, maybe three times as fast as the market.

Statistics:

  • Motorola's revenue rose 41 percent, to $8.7 billion, in the quarter ended July 3.
  • EMC's revenue rose 33 percent, to $1.97 billion, in the quarter.
  • Sun Microsystems' revenue rose 4.3 percent, to $3.11 billion, in the quarter.
  • Motorola's cellphone unit shipped 24.1 million phones, a 52 percent increase from the same period last year.
  • EMC's software revenues were up 64 percent from a year ago.
  • EMC's services revenues rose 45 percent from a year ago.

Sources:

  • "Motorola Reports $203 Million Loss, But Beats Estimates" by the New York Times (no date)
  • "EMC Sees Strong Sales Growth in Latest Quarter" by the New York Times (no date)
  • "Sun Microsystems Reports Surprise Sales Growth" by the New York Times (no date)
  • "Motorola Q2 Earnings Call Transcript" (no date)
  • "EMC Q2 Earnings Call Transcript" (no date)
  • "Sun Microsystems Q2 Earnings Call Transcript" (no date)