Improved Profitabiliy Across The Tech Sector

EDS

Flat Sales But Solid Profit Growth 

EDS (NYSE: EDS), the global technology services company,
has reported flat revenue growth for the quarter ended December 31, 2005, at
$5.1 bn, up 1%  from $5 bn in the
year-ago quarter. Profits, however, improved substantially to $112 mn from $53
mn achieved in the last quarter of 2004. Revenues from Americas remained flat at
$2.4 bn, whereas EMEA revenues were up 3% at $1.6 bn, led by a large contract
from the UK's Ministry of Defence. Asia Pac led revenue growth at 19% among
segments reaching $ 346 mn.

EDS won major contracts with GM, its largest client worth
estimated at over $ 1.2 bn for the full year.

It also won contracts from Spanish financial services companies, and with Sprint
Nextel for a wide range of services across multiple years. EDS shares trade at
$26.7.

GOOGLE

Less Than Market Expectations 

The California-based search engine company Google (NASDAQ:
GOOG) announced has its financial results for the fourth quarter ended December
2005. Google reported revenues of $1.9 bn for the quarter ended December 31,
2005, representing an 86% increase over the fourth quarter 2004 revenues of
$1.03 bn, and a 22% increase over the third quarter 2005 revenues of $1.5 bn.
Growth over the third quarter was driven by expected seasonal strength in both
traffic and monetization. Net profit for the fourth quarter was $372 mn, as
compared to $381 mn in the third quarter, and $204 mn in the same quarter of the
previous financial year. During the period, the company-owned sites generated
revenues of $1 bn, as compared to $885 mn in the third quarter, a 24% increase
over the third quarter revenues. Revenue from partner sites contributed 42% of
the total revenues. This is an 18% increase over network revenues of $675 mn
generated in the third quarter.  Revenues from outside of the US contributed 38% of total
revenues, compared to 39% in the third quarter of 2005 and 35% in the fourth
quarter of 2004. International revenues reflected the unfavorable impact caused
by the appreciation of the US dollar, and stronger seasonal trends in the US.
Google employed 5,680 full time employees worldwide as of December 31, 2005, up
from 4,989 as of September 30, 2005 and 3,021 as of December 31, 2004. The share
is trading at $191.3 per share.

HP

Profit Jumps 30% 

HP (NYSE, Nasdaq: HPQ) has announced results for its first
fiscal quarter, ended January 31, 2006, with revenue of $22.7 bn, up 6% y-o-y.
Profit after tax was $1.2 bn, up 30%. On an annualized basis, revenue in the
Americas grew 10% to $9.7 bn, Europe, the Middle East and Africa grew 1% to $9.4
bn, and Asia Pacific grew 6% to $3.5 bn.

The personal systems group (PSG) revenue reached $7.4 bn,
up 8% on a y-o-y basis. The imaging and printing group (IPG) provided quarterly
revenues of $6.5 bn, growing again at 8% y-o-y. The enterprise storage and
servers (ESS) reported sales of $4.2 bn, up 5% over the same quarter last year.
Revenues of its service division HP services (HPS) went down by 2% y-o-y to $3.8
bn. Software revenues grew sharply at 29% to reach $304 mn, led by growth in HP
OpenView and HP OpenCall. The company expects next quarter revenues to be in the
range of $22.4 bn to $22.6 bn, while full year revenues are estimated to be in
the range of $90 bn to $91 bn. The share of the company currently change hands
at $32.9.

Cisco

Slow Profit Growth 

Cisco Systems, (NASDAQ: CSCO) has reported improved results
for the second quarter ended January 2006. Revenues were up at $6.6 bn, against
$6.1 bn achieved for the same quarter last year, showing a 9.3% growth. Profits
were $1.4 bn, up $1.3 bn achieved in the second quarter of fiscal 2005. During
the quarter, Cisco announced a definitive agreement to acquire
Scientific-Atlanta, a leading player in cable television and related markets.
Cisco now has entered the home markets via the cable television. The company
also announced new products in small business systems, application networking
servers for enterprise and digital video for home markets.

The contribution of US and Canada declined from 53% of
sales to 49%, showing growth of other markets like Europe where contribution
increased from 20% to 25% of sales. In overall terms, products grew by 8% on an
annualized basis led by significant growth in switches (12%) while routers grew
at 7% over the same quarter last year. Advanced technology products showed 7%
growth. The services revenues grew by 14% signifying the strong focus on the
services component of its sales. Cisco expects revenues to grow at 10-12% for
the current fiscal and between 10-15% in the next few years. The shares of the
company currently trade at $17.3.

DELL

Profits Grow 52% 

Dell (NASDAQ: DELL) achieved revenue of $15.2 bn for the
fourth fiscal quarter, up 13% y-o-y, compared to $13.4 bn in the same quarter
last year. Revenue growth for the quarter was mainly driven by growth in
enterprise products and services and strong sales outside the US.
Net profit for the quarter was $1 bn, compared to $0.6 bn in the same
quarter of the previous fiscal. Dell's enterprise business in the quarter,
including storage, servers, services and related software and peripherals,
increased worldwide by 21% y-o-y. Storage revenue was up 41% y-o-y. Dell's
business outside the US increased in the quarter by 21% y-o-y. During the
quarter, the company posted strong growth in all regions of the world. Sales
outside the US were at an all-time high of 43% of the company's overall
revenue for the fourth quarter, up from 40% in the previous quarter. The company
gained share in every region during the year.

Dell announced its first dual-core, widescreen notebook
during the quarter. Dell XPS desktop and notebook shipments were up 20% y-o-y.
Dell shipped 10.2 mn units in the fourth quarter, a 15% y-o-y increase.
Currently Dell is trading at $29.7 per share.