Tech results: So far so good, not out of woods yet

By Duncan Martell - Analysis

SAN FRANCISCO (Reuters) - Phew! The first week of the technology earnings season is over, and many are breathing a sigh of relief because, by and large, the numbers and forecasts from some sector heavyweights were not as bad as expected.

Some were even better than that.

Shares of IBM, Intel Corp and Google Inc all rallied after the companies posted results, though plenty of uncertainty remains, and Wall Street estimates for the second quarter may well be taken down another notch.

Intel, the world's largest chipmaker, said its core microprocessor business was "strong" at the moment, and Chief Executive Paul Otellini, who was in Europe two weeks ago, said he saw no red flags either there or at home.

"From an economic standpoint, the two most mature of our markets (Europe and the United States) are not showing any signs of weakness," he said on the company's conference call. "I did not pick up anything."

Google and IBM said much the same thing. "We're well positioned for 2008 and beyond, regardless of the business environment," said the Web search giant's CEO, Eric Schmidt.

"Second-quarter guidance has been fine, and estimates are generally not falling as many feared," said Justin McNichols, a portfolio manager at Osborne Partners Capital Management in San Francisco.

"Entering the first-quarter earnings season, 2008 estimates for the S&P Tech sector were for a 6 percent year-over-year increase," he said. "Going into earnings, sentiment was this number was not achievable. Coming out of earnings, it appears at least the first half is achievable."