Tuesday, November 22, 2005
TECD reported this morning with results ahead of expectations and above the high-end of mgmt guidance. Both Americas and EMEA were strong sequentially. Gross margin was little weaker due to mix of products and where the product was sold and internal issues. Guidance for January quarter is for growth of 4-7% sequentially and 5%-8% Y/Y, which is on top of US Dollar appreciating about 10% from last year. Which could help us understand little bit why CSCO was cautious on EMEA in January guidance. If EMEA is better than expected given the rise in USD then its all upside for tech. Overall, TECD makes me comfortable that most of tech out there is doing well and end market demand is staying steady atleast with corporates and small-businesses. I am sticking with my call made on Oct18th to get bullish on tech even if Nasdaq is up 9.6% from that day with one caveat that Thanksgiving is as good as we expect it to be. Doing some preliminary work on expectations, it looks as though estimates look reasonable for both December and March 2006.