Technical difficulties: good earnings

Someone please let the technology industry know that the economy is slumping. Of the 10 largest US tech companies, eight (Apple, IBM, Microsoft, <a href="http://www.blackugg-boots.com/black-ugg-kensington-short-boots-women-p-86.html"><strong>black Ugg Kensington Short Boots Women</strong></a> Google, Oracle, Intel, Qualcomm, and EMC) have reported earnings recently. Their news has been good. Aggregate revenue grew by nearly 30 per cent, or 25bn; net income grew by nearly 40 per cent, or 8bn. Apple contributed about half of the dollars, but strip Apple out and the sales and earnings growth rates are still 16 per cent and 23 per cent respectively. All eight managed to beat Street expectations. Guidance (leaving aside Apple's habitual caution) has been fine. This latest quarter comes after the industry <a href="http://www.suprasforcheap.com/supra-skytop-fashion-shoes-c-3.html"><strong>Supra Skytop Fashion Shoes</strong></a> had already compiled a respectable record. Since world stocks peaked in late 2007, the S&amp;P information technology index is up slightly, and 10 per cent ahead of the total S&amp;P. Tech did no worse than the broad market on the way down and outperformed it on the way up; the only sectors it lags over that period are consumer staples and consumer discretionary. And the tech index's earnings have risen nearly 80 per cent since the peak, far overshooting the index's price. Given this, is it too much for tech investors to hope for a little multiple expansion? The eight big companies to announce earnings so far trade at an average forward price/earnings ratio of 11. At the top in 2007, the sector traded <a href="http://www.suprasforcheap.com/supra-038-skytop-shoes-black-red-and-yellow-p-390.html"><strong>supra 038 skytop shoes black red and yellow</strong></a> on a multiple roughly double that. All are thoroughly global, and hence exposed to healthy and growing emerging markets. Most have higher exposure to corporations' strong balance sheets than to consumers' weak ones. These <a href="http://www.echoscrap.info/pages/displayimage.php?album=lastup&cat=0&pos=1"><strong >88-huaiqing2541-ZOL博客</strong></a> bullish arguments must contend with the shadow cast by fallen tech angels such as Nokia and Research In Motion (and, to a lesser extent, Cisco). These companies' recent history shows that, in tech, revenue momentum can reverse and margins collapse very suddenly. This is a reason not to overpay for any one company. But taken as a whole, the sector deserves more respect. E-mail the Lex team in confidence at lex@ft.com