Intel, IBM results show return of corporate computing demand.

By Olga Kharif,

Katie Hoffmann and

Danielle Kucera

Intel and International Business Machines (IBM) issued sales and profit forecasts that reflected demand from companies eager to upgrade computer systems left fallow during the recession.

IBM, the largest

computer-services provider, boosted its full-year profit forecast while Intel, the top chipmaker, forecast second-quarter sales higher than analysts predicted.

VMware, EMC and Juniper Networks, three other business-technology providers, also met or topped analysts' projections.

The quartet of results suggests that after the recession ended in 2009, a rebound in demand may be gathering steam.

Companies are outfitting data centers capable of delivering storage, software and other computing tasks over the Internet.

The global market for such cloud-related services may more than double to $148.8 billion in 2014 from $58.6 billion in 2009, according to researcher Gartner Inc.

in Stamford, Conn.

"The product replacement cycle is finally occurring after the downturn of 2008," said Michael Yoshikami, chief investment strategist for YCMNet Advisors in Walnut Creek, Calif.

"The earnings in all of these companies reflect the fact that businesses are spending again."

Intel said Tuesday that current-quarter revenue will be $12.8 billion, plus or minus $500 million.

That compares with $11.9 billion, the average of analysts' projections compiled by Bloomberg.

IBM's operating earnings will be at least $13.15 a share this year, higher than a previous projection of at least $13 and the $13.08 average estimate of analysts.

Intel, based in Santa Clara, Calif., is benefiting as mobile devices including Apple's iPad drive demand for online services provided by Intel-powered servers.

First-quarter net income rose 29% to $3.16 billion, or 56 cents a share, from $2.44 billion, or 43 cents, a year earlier, Intel said.

Analysts had estimated profit of 46 cents.

Sales increased 25% to $12.8 billion, compared with an average prediction of $11.6 billion.

IBM's sales last quarter climbed 7.7% to $24.6 billion, topping projections, as software, hardware and services revenue jumped.

Equipment sales climbed for the fifth straight quarter as customers continued to upgrade after IBM released its Power7 server-computer system and a new mainframe last year.

VMware, the biggest maker of programs that let computers run multiple operating systems, reported profit excluding certain costs of 48 cents a share.

That exceeded the 42-cent average of projections compiled by Bloomberg.

Sales rose 33% to $843.7 million, the Palo Alto, Calif.-based company said.

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