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Wednesday, 17 July, 2002, 21:15 GMT 22:15 UK
Little respite for tech investors
IBM personal computer
IBM: Cautious outlook report
Mixed results and cautious outlook reports from computer giant IBM and memory chip maker AMD have left technology investors with little to celebrate.

IBM said on Wednesday that profits for the April to June period slumped to $54m (32.4m) from $2.04bn one year earlier because of one-off costs stemming from a massive restructuring operation.

But the company's profits figure came in ahead of analysts' expectations once these exceptional costs were stripped out, cheering investors.

IBM's share price jumped 3.6% in after-hours trade.

Computers left on the shelf

Also on Wednesday, memory chip maker AMD said it crashed from a $17.4m profit one year ago to a $184.9m loss, while sales fell by more than a third to $600.3m.

AMD chief financial officer Robert Rivet said the firm's deteriorating performance reflected " a weaker than expected (personal computer) market, particularly in North America and Europe."

AMD shares fell five cents to $9.28 in after-hours trade on Wall Street.

The two companies are seen as bellwethers for the wider technology sector.

IBM makes a wide range of computer equipment, while AMD is the second biggest maker of computer-grade memory chips after Intel.

Both firms have struggled in recent months because of falling demand for computer equipment as businesses and consumers alike rein in spending on information technology.

IBM has now reported lower profits for four consecutive three-month periods, while AMD warned twice last month that sales were lagging expectations.

No upturn yet

Neither firm is expecting an imminent upturn in demand.

AMD said it expects sales to "improve modestly" over the next three months.

IBM chief executive Sam Palmisano would say only that he was confident the firm will "gain or hold share in our high-priority growth areas of our industry."

The company's chief financial officer John Joyce added that revenues in the firm's computer services division would come in lower than initially expected in the months ahead.

"An economic pickup would be the catalyst to help customers move ahead with their plans, opening up the pipeline," he said.

On Tuesday, the world's biggest chip maker Intel turned in higher profits but missed sales forecasts, while computer maker Apple said both profits and sales were down on the year.

See also:

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19 Jun 02 | Business
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