Google misses Q2 earnings estimates despite revenue and profit rise, Microsoft loses $900M on Surfac
Two tech giants and Apple competitors revealed their earnings for the past quarter today, with Google missing estimates despite solid revenues and improved profit, while one of Microsoft's first in-house tablet attempt was shown to be a certifiable failure.
Google reported income of $3.23 billion on $13.11 billion in revenue for the quarter ending June 30. Including its Motorola operations, Google's revenue was $14.11 billion, up considerably over the $11.81 billion figure it posted for the year-ago period. Net income for the year-ago quarter was $2.79 billion.
Despite the rise in both profit and revenue, Google shares dropped more than five percent in after-hours trading. The search giant reported that the average price it receives for its online advertising business had declined six percent year-over-year in the second quarter. That decline came in the wake of a four percent drop from the first quarter.
The Motorola division, which is preparing to launch a new flagship phone, saw revenues of $988 million in the quarter. That division has continued to lose money for Google, posting a loss of $342 million this past quarter.
Microsoft, meanwhile, posted lower-than-expected quarterly earnings, reflecting the software giant's continuing struggle to adapt to the new computing paradigm. The Redmond company's revenue for the quarter rose 10 percent to $19.9 billion, aided in part by sales of its Office productivity suite. Analysts, though, had expected Microsoft to post $20.7 billion in revenue.
The Windows maker saw a net income of $4.96 billion for the quarter. In the year-earlier period, Microsoft posted a $492 million loss, its first quarterly loss since going public in 1986. That negative figure stemmed largely from a massive writedown for its online services division.
Once again, Microsoft was forced to take a sizable writedown this quarter. This time the firm wrote down 66 cents per share on its failed Surface RT device. Microsoft recently cut the price of the Windows RT-based Surface unit, which has struggled to attract consumers even though it was meant to take on Apple's bestselling iPad.
The total value of the Surface RT writedown came to $900 million. Microsoft representatives said the company is aware of its problem in competing with the iPad and is working to address it.
""I want to be very clear," said Microsoft CFO Amy Hood, according to The Wall Street Journal, "we know we have to do better, particularly on mobile devices."
Google reported income of $3.23 billion on $13.11 billion in revenue for the quarter ending June 30. Including its Motorola operations, Google's revenue was $14.11 billion, up considerably over the $11.81 billion figure it posted for the year-ago period. Net income for the year-ago quarter was $2.79 billion.
Despite the rise in both profit and revenue, Google shares dropped more than five percent in after-hours trading. The search giant reported that the average price it receives for its online advertising business had declined six percent year-over-year in the second quarter. That decline came in the wake of a four percent drop from the first quarter.
The Motorola division, which is preparing to launch a new flagship phone, saw revenues of $988 million in the quarter. That division has continued to lose money for Google, posting a loss of $342 million this past quarter.
Microsoft, meanwhile, posted lower-than-expected quarterly earnings, reflecting the software giant's continuing struggle to adapt to the new computing paradigm. The Redmond company's revenue for the quarter rose 10 percent to $19.9 billion, aided in part by sales of its Office productivity suite. Analysts, though, had expected Microsoft to post $20.7 billion in revenue.
The Windows maker saw a net income of $4.96 billion for the quarter. In the year-earlier period, Microsoft posted a $492 million loss, its first quarterly loss since going public in 1986. That negative figure stemmed largely from a massive writedown for its online services division.
Once again, Microsoft was forced to take a sizable writedown this quarter. This time the firm wrote down 66 cents per share on its failed Surface RT device. Microsoft recently cut the price of the Windows RT-based Surface unit, which has struggled to attract consumers even though it was meant to take on Apple's bestselling iPad.
The total value of the Surface RT writedown came to $900 million. Microsoft representatives said the company is aware of its problem in competing with the iPad and is working to address it.
""I want to be very clear," said Microsoft CFO Amy Hood, according to The Wall Street Journal, "we know we have to do better, particularly on mobile devices."
Comments
Really? Two words of advice then...Fire Ballmer!
That is all.
Yow. Two big misses.
Google GAAP earnings flat at best; Moto is a continuing (and growing) money leak. Worst of all, per click ad rev, their real bread and butter, continues to deteriorate. How is (well, was) GOOG carrying a 28 P/E?
MSFT continuing to crumble in a post-PC world, like the proverbial train wreck in slo-mo. Big miss even before the ~ billion dollar Surface RT write-off.
I'd say that any rational response to this would be to invest in AAPL, but the market is not rational - wouldn't surprise me to see it dragged down tomorrow.
"That's the biggest miss we've ever seen from Microsoft, the biggest that I could remember," said Brendan Barnicle, an analyst at Pacific Crest Securities. "It looks like everything was weak and that's what we need an explanation on."
http://finance.yahoo.com/news/microsoft-profit-below-estimates-tablet-201712038.html
"Once again, Microsoft was forced to take a sizable writedown this quarter. This time the firm wrote down 66 cents per share on its failed Surface RT device."
I know I am not the only one to say this: This is what happens when a company only ships and doesn't sell. So perhaps those who insist that Samsung is not really selling a large number of smartphones can finally understand (or admit) that there's a consequence to building products that no one buys. And that consequence eats into profits.
The Surface RT: The answer to a question no one was asking. Make a device that is useful for more than writing Word documents and dancing like a hipster douche and you might get people to buy more.
Quote:
Originally Posted by pdq2
Yow. Two big misses.
Google GAAP earnings flat at best; Moto is a continuing (and growing) money leak. Worst of all, per click ad rev, their real bread and butter, continues to deteriorate. How is (well, was) GOOG carrying a 28 P/E?
I'm confused, Google's income is up 16% since this quarter last year, and their revenue is up a "considerable" 19%. That is flat?
Or are the numbers in the article not GAAP?
Quote:
Originally Posted by afrodri
I'm confused, Google's income is up 16% since this quarter last year, and their revenue is up a "considerable" 19%. That is flat?
Or are the numbers in the article not GAAP?
Maybe they were referring to either GAAP operating income or operating margin? Because that was actually flat.
Investors are emotionally invested in certain companies. It's true for Apple as well, but Apple has historically been on the wrong side of big investors for so many years that they still have trouble getting the respect (and in turn investment) from much of the Street. Lots of investors got in when they realized Apple was killing everyone else, but they've just as quickly gotten out or started to bet on a loss with Apple, thinking "they have to fall at some point".
They forgive everyone else for the bone-headed products and moves, but when Apple disappoints the Street by beating their (the Streets) baseless forecasts, they get punished. It's sad really.
Originally Posted by AppleInsider
... Microsoft's first in-house tablet attempt was shown to be a certifiable failure.
Surprise!
Originally Posted by AppleInsider
""I want to be very clear," said Microsoft CFO Amy Hood, according to The Wall Street Journal, "we know we have to do better, particularly on mobile devices."
Amy, we all love you and we want you to get well again.
The first step to recovery is admitting you have a problem.
.
Quote:
Originally Posted by afrodri
I'm confused, Google's income is up 16% since this quarter last year, and their revenue is up a "considerable" 19%. That is flat?
Or are the numbers in the article not GAAP?
I'm confused too:
Quote:
GAAP operating income in the second quarter of 2013 was $3.12 billion, or 22% of revenues. This compares to GAAP operating income of $3.24 billion, or 27% of revenues, in the second quarter of 2012.
GAAP net income including net income from discontinued operations in the second quarter of 2013 was $3.23 billion, compared to $2.79 billion in the second quarter of 2012. Non-GAAP net income in the second quarter of 2013 was $3.23 billion, compared to $3.36 billion in the second quarter of 2012
Not sure how net income can be _more_ than operating income, so I'd suggest checking the link - see if you can figure it out.
I'm always a tad suspicious when the earnings are presented 10 different ways, including/excluding income from discontinued operations, or including/excluding stock-based compensation, etc, etc.
amazed that is all they lost on the RT - really only inventory - put in marketing cost and this thing was a disaster. Surface RT was just another tablet with a mickey mouse OS, good riddance.
Schadenfreude.
PC World reports:
Source: Microsoft Surface RT isn't dead
"This parrot's not dead - it's just pining!"
Google's losses probably came from their Chromebook! LOL!
(Now I just hope Apple's numbers next week will not make them come out again.)
P.S.: Somebody else noticed it, somehow. [URL=http://247wallst.com/technology-3/2013/07/18/the-first-day-in-memory-no-one-cared-about-apple/]http://247wallst.com/technology-3/2013/07/18/the-first-day-in-memory-no-one-cared-about-apple/[/URL]
The entire system is ridiculous.
Traders and analysts, people who trade and analyse because they don't appear confident enough in their abilities to actually run a company, not to mention people with horrendously varied performances records themselves, decide how much value to assign to said companies based on 'what they think may happen in the future'.
Favorites aside, all three of these companies are generating such phenomenal amounts of income that, even if we were to take worst case example Microsoft's track record over the past ten or so years, not one of them is likely to disappear any time in the near future.
If that isn't the kind of thing that we should be investing in then I don't know what is.
Short-term thinking, people: providing a solid return in f@cking up the planet in more ways than you can imagine.