Tech results show resilience but future more gloomy

By Gabriel Madway and Jim Finkle

SAN FRANCISCO (Reuters) - Microsoft (MSFT.O) and a diverse group of technology companies met or beat Wall Street earnings targets, but uncertain outlooks undermined a short burst of enthusiasm from investors.

Microsoft itself initially gave investors some relief by dropping its forecast less than feared, but an after-hours rally in its shares fizzled.

"Even where earnings outperform expectations, there is still not a lot of good guidance going forward," said Diane Swonk, chief economist for Mesirow Financial. "It's very hard to give guidance, even if you have done well. It's very hard to know where the world is going."

Shares of Microsoft, whose products range from the Windows operating system to the Xbox video game system, were flat in extended trade after closing at $22.32.

"The company continues to set reasonable expectations and meet or beat them as they did here," said David Katz, chief investment officer of Matrix Asset Advisors. "The expectation was that they would bring down guidance, they only did that in a modest way. They seem to have a grasp on all their business."

Technology firms over the past few weeks have repeatedly complained of poor visibility into the December quarter and beyond, and worries about the global economy have prompted many to issue cautious forecasts.

Ingram Micro (IM.N), the world's biggest computer hardware distributor, elected to end its practice of issuing guidance altogether, citing the "unpredictability" of global markets. It reported quarterly sales declines in Europe and Asia, indicating that economic pain is spreading across the globe.

That report, combined with the forecast from Microsoft, are signs that technology spending will not hold up next year, said Fred Hickey, editor of the High-Tech Strategist Newsletter, a publication widely read by investors.