This past holiday season demonstrated once again how popular tablets, smartphones and laptops are with consumers. It’s of little wonder, then, that a recent story in USA Today forecasted that 2014 will see big profits for technology companies. The same story predicts that tech companies will remain some of the most profitable U.S. businesses. Again, this isn’t much of a surprise.
A strong performance
The USA Today story states that in 2014 technology companies that are part of the S&P 500 index should earn a net income 9.3 percent higher than it was in 2013. This information emanates from FactSet, a firm that calculates the earnings estimates of Wall Street. This year, then, stands to be an improvement from 2013: In that year, tech companies only saw their earnings rise by a skimpy 1.9 percent.
Profit margins will continue to rise in this sector, too, in 2014, according to USA Today. The newspaper reported that tech firms are expected to see an average profit margin of 15 percent to 16 percent in 2014. That, of course, is an exceptionally strong profit margin. To put it simply, tech firms in the United States should be quite profitable this year.
Why so much success?
This success shouldn’t be surprising. Today’s consumers are obsessed with their tech gadgets. And this is a long-time trend. Just look at how popular tablets and smartphones are becoming. Video-game systems remain hot sellers. And tech companies are evolving and updating their offerings on a near constant basis. Tech is definitely king today.