Earnings season started off well, with most technology companies reporting at or above expectations. Here are a few highlights as well as other stories.
Earnings Highlights
Yahoo (NASDAQ: YHOO) and Google (GOOGL): Yahoo's results impressed investors, while Google's didn't. That doesn't of course mean that Yahoo is doing better than Google, but simply that expectations regarding Google are higher. Yahoo prices are also a response to Alibaba, which generated very strong growth in the last quarter. Yahoo stands to make a lot of money when Alibaba goes for its IPO later this year.
On the pricing front, Yahoo is seeing stronger increases than Google, which is winning in volumes. But growth rates alone are not good for comparing companies because actual prices and volumes are not mentioned by either. Going by absolute numbers, Yahoo's search business grew around 9% year on year, while Google's grew 19%. Google's earnings increased 6% from last year, while Yahoo's declined over 16%.
AMD and Intel (NASDAQ: INTC): Both Intel and AMD posted strong results, exceeding our expectations. But there is more room for upsidei n AMD at the moment because of several new and exciting products, as well as notable wins on all the gaming platforms. AMD has also made progress with foundry partners and its latest APUs should pick up some share in mobile.
Intel, of course, remains a power to reckon with given its dominant position in PCs and servers. But success in mobile remains elusive and delayed product launches could eat into its process lead and tell on its margins. In the meantime, Intel is working on share gains in mobile by subsidizing its products. An exciting area of growth remains the Internet of Things (IoT).
IBM: International Business Machines (NYSE: IBM) posted earnings that met our expectations on revenue that again fell short. The hardware business continued to underperform and IBM also announced the sale of the server business to Lenovo. The offloading of low-margin and underperforming businesses as well as renewed focus on growth markets could help the company achieve its 2015 earnings target of $20 a share.
Microsoft (NASDAQ: MSFT) Opens A Bag Of Goodies
Microsoft wants us to know that it isn't behind in big data analytics. In fact, it has commissioned IDC to discover its uses. Based on research involving 2,000 mid-sized organizations across 20 countries, IDC finds that organizations could see total revenue and cost efficiencies of $1.6 trillion dollars over the next 4 years by installing suitable systems and processes.
At the San Francisco event where Microsoft made this announcement, the new CEO Satya Nadella also shed light on his concept of ambient intelligence. The company's SQL Server is already the mostly widely used database platform.
Microsoft has now launched the latest version (2014), along with the Analytics Platform System, which allows the combination of its SQL database with Hadoop technology that facilitates big data analytics. Coming soon is the Microsoft Azure Intelligent Systems Service, which will collect user-generated data from devices running on any OS.
Online Retailer Big On Devices
For the umpteenth time last week, there was a rumor that e-tail giant Amazon.com (NASDAQ: AMZN) was going to make a mobile phone. But this time was slightly different because the Wall Street Journal apparently has sample models that people were able to demonstrate. Images on the phone will appear 3-dimensional to users because of a retina-tracking technology, which is likely to help online purchases. This would have been creepy a few months back, but with Google Glass escapades being widely reported, people are getting used to the feeling.
Amazon's appetite for gadgets has been growing over the last few years. The company started with a very effective e-reader that quickly metamorphosed into a rather effective tablet. Recently, it's launched the TV set top box and even more recently, a grocery-ordering device called Dash.
Amazon is a retailer, but mobile devices and their makers are increasingly selling content and thereby encroaching on its turf. Amazon's strategy is not too complex, it sells Prime subscriptions that are so cost effective, it would be hard to make a switch. So you stick with Amazon and its eco system, buying all that it has to offer.
| Company | Last Week | Last 6 Months |
| AAPL | +0.95% | +0.69% |
| FB | +2.30% | +9.45% |
| YHOO | +12.13% | +6.81% |
| GOOG | +1.34% |
|
| GOOGL | +1.47% | +8.20% |
| MSFT | +2.09% | +14.35% |
| INTC | +2.19% | +12.01% |
| CSCO | +2.11% | +1.22% |
GOOG = Class C shares (new, non-voting)
GOOGL = Class A shares (old, 1 vote per share)
Other stories you may have missed-
Apple (NASDAQ: AAPL) Could Favor Yahoo Over Google: According to the latest rumor from Re/code, Yahoo could soon be the default search engine on Apple devices. Google's relationship with Apple has soured because of Android and the competitive tactics employed by its hardware partner Samsung.
But Google still offers a very satisfactory service and makes a ton of money from the platform. Yahoo, on the other hand, is saddled with an unsatisfactory deal with Microsoft and is looking for a means to grow its search revenue. CEO Mayer has focused on getting close to Apple.
Twitter (NYSE: TWTR) Could Analyze Own Data: Twitter has decided to acquire Gnip, which analyzes the tweets generated on the Twitter platform for sale to advertisers. Twitter has relationships with four such companies and the company hasn't said anything about further consolidation. This could be Twitter's attempt to better understand its users given the growing competition from other social networking platforms.
Companies Reporting This Week: We are in the thick of earnings season, so there are a large number of tech companies reporting this week. Here's a list of the top dogs - Apple, Facebook, Microsoft, VMware (NYSE: VMW), EMC (NYSE: EMC), Juniper (NYSE: JNPR), Netflix (NASDAQ: NFLX), Amazon, Zynga (NASDAQ: ZNGA), Texas Instruments (NASDAQ: TXN), Xilinx (NASDAQ: XLNX), Altera (NASDAQ: ALTR) and KLA-Tencor (NASDAQ: KLAC).
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