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Must-know: What to expect from this week’s tech sector earnings

Puneet Sikka

Overview: What to expect from this week's tech sector earnings (Part 1 of 8)

Decline in tech sector’s stocks last week indicates that all isn’t well

The tech sector’s earnings season starts this week with Intel (INTC), Yahoo (YHOO), eBay (EBAY), SAP (SAP), and Google (GOOGL) as some of the major companies reporting their 2Q14 earnings. It will be interesting to see how these companies report their earnings. The tech heavy NASDAQ (or IXIC) index fell 1.4% on July 8 this week, while the broader index Dow Jones Industrial Average Index (or DJI) declined by only 0.7%. This drop seems to indicate that all isn’t well with the tech sector. However, in this series we’ll analyze how each company’s earnings could turn out.

Stock price performance of companies reporting this week

The previous chart shows the stock price performances of the companies in the last three months that are reporting their earnings this week. Although eBay and SAP’s stocks declined some in the quarter, Yahoo, Google, and Intel’s stocks increased. Out of all these, Intel’s stock gained the maximum by more than 19% during the last three months. It raised its second quarter and full year 2014 revenue guidance in a press release in June. Intel also mentioned that it predicts better than previously expected gross margins for the second quarter. The company said that stronger-than-expected demand for business personal computers (or PCs) helped it revise its guidance. It’s important to note that Intel depends heavily on PC market performance because it’s the dominant player in the PC processor market.

Continue to Part 2

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