Intel, IBM results show computing demand

Intel Corp. (INTC) and International Business Machines Corp. (IBM) issued sales and profit forecasts that reflected demand from companies eager to upgrade computer systems left fallow during the recession. IBM, the largest computer-services provider, boosted its full-year profit forecast, while Intel, the top chipmaker, forecast second-quarter sales higher than analysts predicted. VMware Inc. (VMW) and Juniper Networks Inc. (JNPR), two other business- technology providers, also met or topped analysts' projections. The quartet of results suggests that after the recession ended in 2009, a rebound in demand may be gathering steam. Companies are outfitting data centers capable of delivering storage, software and other computing tasks over the Internet. The global market for such cloud-related services may more than double to $148.8 billion in 2014 from $58.6 billion in 2009, according to researcher Gartner Inc. in Stamford, Connecticut. "The product replacement cycle is finally occurring after the downturn of 2008," said Michael Yoshikami, chief investment strategist for YCMNet Advisors in Walnut Creek, California. "The earnings in all of these companies reflect the fact that businesses are spending again." Companies curtailed computer and software spending during the recession, which stretched from December 2007 to June 2009. The belt-tightening crimped sales at Intel, Microsoft Corp. and other technology bellwethers and sent the Nasdaq Composite Index (CCMP) to a more than six-year low in March 2009. Intel's current-quarter revenue will be $12.8 billion, plus or minus $500 million, the company said yesterday. That compares with $11.9 billion, the average of analysts' projections compiled by Bloomberg. - Bloomberg