We’re roughly half way through the June quarter earnings season. Generally speaking, earnings growth is tracking as expected, but revenue growth has been light. Drilling down on several sectors, financials and industrials have been strong, while technology has been mixed and fertilizer stocks have gotten crushed.
Technology cuts a very wide swath and includes a number of areas — from software to chips to PCs, smartphones, tablets, data centers and the equipment inside of them. It also includes gaming companies and cyber security ones, as well as online properties and social media companies. In other words, there are hundreds of companies that are part of the “tech-plex.”
A number of these sub-sectors have reported mixed results, such as the smartphone space with Samsung, Nokia (NOK), Blackberry (BBRY) and others. Price cuts and layoffs at Blackberry, in particular, don’t give you the sense that the company’s outlook is vibrant. That looming smartphone bloodbath is one of the many reasons why I haven’t recommended any of those companies in PowerTrend Profits.
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