US fiscal crisis seen hurting tech earnings
Tech companies usually enjoy a spike in orders in December as corporations use money left over in their budgets to buy goods on their wish lists – information technology products that are nice to have, rather than essential. But the so-called year-end budget flush was not as deep in 2012 as in typical years, according to tech analysts and other experts citing conversations with corporate technology buyers and sales sources.
They said companies held back on IT purchases in December in part because of Washington's protracted negotiations to avoid the fiscal cliff, which is a package of automatic tax hikes and spending cuts that could have pushed the already soft U.S. economy into recession.
It took until late on Jan. 1 for House Republican lawmakers led by John Boehner to agree to a bill to avert the cliff, which President Barack Obama signed into law the next day.
"CIOs and CFOs were not making investments," said Andrew Bartels, an analyst with Forrester Research who advises corporate technology buyers. "If Boehner and Obama had been able to strike a deal by around Dec. 15, we would have had end-of-quarter investments."
Analysts say they expect tech spending to remain subdued through at least the first quarter, as businesses wait to see if Congress can
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