Earnings for the high-tech sector dropped by 226% in the first quarter of 2001 relative to the first quarter of 2000, according to a report from Canada NewsWire.

The analysis looked at 193 Canadian high-tech public companies reporting in the most current earnings period. Although earnings are down substantially, there was an increase in total revenues of 21.67% from the first quarter a year ago. Revenue jumped from $22.0 billion in 2000 to $26.7 billion in 2001. There was virtually no change reported in total cash flows from operating activities in the technology sector compared to those reported a year ago.

“The computer industry is in recession but the worst is over and we are on the cusp of improvement,” said Fred Ketchen, managing director, equity trading, ScotiaMcLeod. “Tech companies have cut margins and discounted prices to maintain their revenue stream.”

“Although retail investors are nervous and shying away from investing in high-tech stocks, institutional investors don’t want to be left out when the tech stocks start accumulation,” added Ketchen. “If they want to outperform the market, they have to stick with it. Forecasts from larger tech companies indicate the market is picking up.”