NEW YORK (CNN/Money) – Two more tech bellwethers are on tap to report their latest quarterly results this week, but neither company is likely to give investors an upbeat forecast.

Applied Materials, the largest manufacturer of semiconductor equipment, reported a net loss of 4 cents a share on Tuesday. Excluding restructuring charges, it broke even. Analysts were expecting a profit of 2 cents a share, up from a penny a year ago, according to First Call. The company reported revenue of $1.1 billion, missing the consensus estimate of $1.2 billion..

But investors were already prepared for a weak outlook, since Applied Materials (AMAT: Research, Estimates) warned last month that orders in the first quarter would drop 35 percent sequentially, much worse than the company's initial projection of a 20 percent decline.

Dell Computer, the second largest PC maker, will be reporting its fiscal fourth-quarter and full-year results Thursday. And even though it should post strong results, with earnings per share expected to increase 44 percent to 23 cents and sales to be up 20 percent to $9.7 billion, Dell (DELL: Research, Estimates) probably will cite market share gains and cost cutting as the driving force behind its results -- and not a pickup in demand for technology in general.

In this respect, Dell's comments will probably bear a close resemblance to those issued by Cisco Systems last week. Cisco reported better than expected earnings but said that sales for this quarter could be lower than expected.

Both companies will probably be asked during their respective conference calls about how the situation in Iraq will impact their next quarterly reports. Cisco didn't mention Iraq by name in its conference call last week, but CEO John Chambers did refer to "geopolitical concerns" that were constraining corporate spending.

But Dell and Applied Materials could be at greater risk of an Iraq spending fallout, says Thomas White, chairman of Thomas White Asset Management, which runs three mutual funds as well as Global Capital Institute, an independent research firm. White's funds do not own Dell or Applied Materials.

"The war is delaying a lot of personal and business decisions until a clearer picture takes shape and spending on PCs is a function of consumer and business demand," said White. Dell sells PCs by the phone and over its Web site and has an extensive retail campaign catered to the average consumer.

But Barry Mills, a hardware analyst with mutual fund company Dreyfus, says that Dell's prospects for this year still look solid. Despite the near-term spending concerns, Mills says that Dell should benefit from a replacement cycle as many corporate customers could get rid of older computers that they've had for nearly four years. (Companies typically tend to replace computers every three years or so.)

To that end, Dell is expected to post solid results for the current quarter, which ends in April. Analysts are projecting earnings per share of 23 cents, up from 17 cents a year ago and revenue of $9.5 billion, compared with $8.1 billion last year.

For Applied Materials, though, conditions seem a bit weaker. Its biggest customer is semiconductor kingpin Intel, which makes the chips that most Windows-based computers run on. Intel said in January that it expected its capital expenditures for 2003 to be significantly lower than last year ... not a good sign for Applied Materials.

Another big Applied Materials customer, Taiwan Semiconductor, also recently announced that it would probably spend less than last year. Analysts are predicting a flat second quarter for Applied Materials, with earnings of 3 cents a share and sales of $1.2 billion, unchanged from the same period a year ago.

Both stocks are off to a weak start this year. Applied Materials is down 9 percent and Dell has dropped 13 percent. But each company, like fellow tech bellwethers Cisco, Intel and Microsoft, has a strong balance sheet that should give them a cushion even if the spending environment remains weak.

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James Abate, manager of the GAM American Focus fund, says that Applied Materials, with about $5 billion in cash and just $574 million in long-term debt, should continue to gain market share even if orders continue to drop. "Applied Materials can use its balance sheet as a weapon," Abate said. He owns shares of Applied Materials in the fund.

Abate says that he likes the stock at these levels with the stock trading at just 2.5 times book value, which is at the low end of its range over the past few years. The stock is also trading at a discount to competitors Lam Research and KLA-Tencor even though it has the stronger market position. Abate does not own any other semiconductor equipment companies.

"You don't need to go down the spectrum. You just focus on whoever has the strongest balance sheet," said Abate. "When things are inexpensive, you might as well buy the best."

Dell has $4.3 billion in cash and just $514 million in debt. For this reason, Mills thinks that both companies might face more pressure to pay a dividend. Dreyfus owns both stocks.

"If you are a big company and you dominate your industry and generate a lot of cash you should share it with investors," said Mills. However, Mills doesn't expect either company to make a dividend announcement in conjunction with their latest earnings report. Moreover, he thinks that Dell is far more likely to begin paying a dividend in the near future since Applied Materials is an extremely cyclical company.

And Mills says that Dell, now trading at about 23 times earnings estimates for this fiscal year, which ends in January 2004, is a more rational entry point for the stock than it has tended to trade at. "What do you pay for a company that's in a bad industry but is growing earnings nicely? This level seems reasonable," Mills said.