Ms. Graham-Hackett: My coverage is principally computer hardware and networking companies. In the computer hardware space I cover the box makers, PC companies, basically Dell (DELL), Gateway (GTW), Apple Computer (AAPL), Hewlett-Packard (HPQ), and then up the food chain, IBM (IBM) and Sun Microsystems (SUNW), as well as names such as NCR (NCR) and Lexmark (LXK). Then in the networking space I cover 3Com (COMS), Cisco Systems (CSCO), Enterasys (ETS), Foundry Networks (FDRY), and Juniper Networks (JNPR).
TWST: Let's look at the computer hardware space first. What's gone on
there so far this year?
Ms. Graham-Hackett: Well, it's been very interesting. As you know, a
handful of names have appreciated quite a bit since the beginning of the
year in anticipation of the second half recovery in IT spending. So the
focus in the Q2 earnings report was on comments regarding corporate IT
spending from some of the larger enterprise companies and whether
they've seen any indications of a material change. I guess the latest
read we've gotten was from Dell and HP. Dell said they had not seen any
uptick in RFP activity, and HP similarly said they had not seen a
material change in what has been a challenging environment, and I think
their results echoed that. IBM, in addition, said they were optimistic
on the second half recovery, but had not seen any material change in
spending from their customers. I think most of the excitement has
surrounded comments that indicate that the glass is half full rather
than half empty, which we probably would have used to describe the IT
demand outlook in the beginning of the year. Now vendors are saying
that, indeed, their customers are interested and they plan to spend
additional monies, but the outlays just haven't occurred yet. Meanwhile,
if you compare this with the first half, the comments surrounded a
situation where there was so much uncertainty that most customers
declined to commit to new projects, and they had no plans to loosen
their purse strings. And, quite frankly, most forecasters talked about
flat IT spending at best, and it could in fact be down on a year-over-
year basis.
Tickers included in this excerpt: AAPL, COMS, CSCO, DELL, ETS, FDRY, GTW, HPQ, IBM, INTC, JNPR, LXK, MSFT, NCR, SUNW
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