View from the top: Q3 13 final view
At first glance, aggregate third-quarter performance of the top 100 global technology companies tells the same story as in the first and second quarters of 2013. But a deeper look suggests that the top 100 may be poised to turn a corner toward growth.
YOY aggregate sales growth for Q313 was negative for the third consecutive quarter (though it rounded to zero). Aggregate operating income growth again was in the single digits (9% YOY), R&D eked out 1% YOY growth and capital expenditure fell 7% YOY.
Once again, it appears that Q313 growth driven by the five megatrends of smart mobility, cloud computing, social networking, big data analytics and accelerated technology adaptation was unable to fully compensate for declining sales of the legacy products those megatrends have disrupted. But the gap narrowed: YOY aggregate sales declined 2% in Q113, 1% in Q213 and only 0.2% in Q313.
Top 100 technology companies’ key performance indicators (KPIs)
- Aggregate sales for the top 100 global technology companies declines less than 1% year-over-year (YOY) to $641 billion — the third consecutive YOY decline.
- Aggregate operating income grows 9% YOY in Q313, to $80 billion.
- Although declining demand for legacy products and services continues to offset growth from the innovative megatrends (mobile, social, cloud, big data analytics and accelerated technology adaptation), the top 100 appear poised to turn the corner toward growth.
- M&A sets a record: after several sluggish quarters, disclosed value of the top 100 global technology companies’ M&A transactions more than quadruples sequentially to $33.3 billion in Q313 — a post-dotcom-era record.
- Aggregate sales growth for the 25 fastest-growing public technology companies falls to 14% YOY from 25% in Q213.
- Big data analytics, storage, security, health care and low-power technologies were the main drivers of IPO and venture capital investments during Q313.
- Stock repurchases increase 76% YOY to $29.1 billion.
Top 100 technology companies' key performance indicators (KPIs)
Source: EY analysis of Capital IQ data, accessed 22 November 2013.×