More tech woes as economy slowsApril 11, 2008: 9:02 AM ET
By Scott Moritz
The tech sector -- read Cisco (CSCO), EMC (EMC), Dell (DELL), Hewlett-Packard (HPQ) -- got hit with more bad news as computer networking shop Foundry (FDRY) reported a sales shortfall in the first quarter. The news comes on the same day that everyone's favorite conglomerate, GE announced a stunning profit warning sending the market down early Friday.
GE (GE) said its weakness was in its financial services business, tied to a slowing economy and a rough credit market. The rising economic pressure has helped dampen demand for new information technology systems says Foundry, which cut its first quarter sales target to $149 million, 9% below analysts estimates.
In the first quarter, business was more challenging because the "macroeconomic environment evolved from the financial market crises which we believe led some customers to delay their purchase decisions," Foundry CEO Bobby Johnson said in a press release.
The news gives tech investors another splash of ice water and comes two weeks after Fortune reported that Cisco was doing some belt tightening as growth in orders slows.
Foundry shares fell 9% and Cisco was down 2% in early trading Friday.