By all means, Intel was on top of its game in the second quarter of 2012. The Santa Clara chip maker reported quarterly revenue of $13.5 billion, operating income of $3.8 billion, and net income of $2.8 billion. Talk all you want about the PC sales slump, Intel still performed well, with its PC Client Group pulling in $8.7 billion in revenue, up 3 percent sequentially, along with its Data Center Group adding another $2.8 billion (up 14 percent sequentially). If the numbers are so strong, why is Wall Street on edge?
Facebook co-founder Mark Zuckerberg tied the knot over the weekend, marrying his sweetheart of more than 9 years, and hopefully his marriage doesn't sputter the way Facebook's initial public offering (IPO) has. On just its second day of trading, the world's largest social playground saw its shares dip below its IPO price of $38 on Monday, a bad sign for those who thought pouring a ton of money into Facebook at the outset would lead to easy riches.
Scanning AMD's financial report for the first quarter of 2012, you would think the Sunnyvale chip maker is in big trouble. Revenue was $1.59 billion, a nice number if not for the fact that it represents a net loss of $590 million, or $0.80 cents per share, along with an operating loss of $580 million. That's a 6 percent sequential decrease and a 2 percent decrease year-over-year. Non-GAAP earnings were $0.12 a share. So why wouldn't investors want to hit the panic button?
Dell on Tuesday reported financial results for its second fiscal quarter of 2012 and described its performance as "strong" based on $15.7 billion in revenue. That's up 1 percent from last year, and 4 percent sequentially. Meanwhile, Dell's operating income for the first half of 2012 jumped 50 percent, and GAAP earnings per share rose a healthy 71 percent to 48 cents. So why did Dell's stock drop so sharply in after hours trading?
Microsoft’s performance during the fourth quarter not only exceeded the Street’s expectations but also saved some blushes. The Redmond-based company earned $16.04 billion in revenue, a 22% rise compared to the same period last year, and enough to get it past Apple’s quarterly revenue of $15.7 billion. The Street had foreseen Apple bettering Microsoft’s quarterly revenue for the first time ever, but MS had other plans.
Windows 7 continued its stellar performance during the quarter and, along with Office 2010, accounted for a large part of the company’s growth. “We saw strong sales execution across all of our businesses, particularly in the enterprise with Windows 7 and Office 2010,” said Kevin Turner, chief operating officer.
According to a press release issued by the company, “Operating income, net income and diluted earnings per share for the quarter were $5.93 billion, $4.52 billion and $0.51 per share, which represented increases of 49%, 48% and 50%, respectively, when compared with the prior year period.”
Wall Street IT professionals are gearing up to increase spending on transformational initiatives in 2010 and 2011, with most of the additional budget in IT investments for analytics going towards risk, compliance, and trading, IBM said.
"Coming out of the largest financial crisis in modern day history, there has never been a more important time for firms to capitalize on technology investments to make sense of the data and gain a more sophisticated understanding of risks," said Shanker Ramamurthy, general manager, IBM Financial Services Sector. "The road to recovery is built on infusing intelligence across operations, streamlining costs and getting back to basics so that firms once again focus on innovation and growth.
The survey pinged nearly 250 business and IT Wall Street dudes, and almost half of them said they expect 20-30 percent of their technology budgets to go towards the above mentioned areas. And of all the regulatory activities, 55 percent identified systemic risk as the largest driver of IT investments.
It's important not to confuse sales with shipments. Huberty expects Apple to sell more than 6 million units this year. However, Wall Street is not as sanguine over the iPad's sales prospects and has settled for a more conservative estimate of 3-4 million units.
Whether you're a fan of Apple's recently unveiled iPad or not (and judging by the reader comments, many of your are not), you were probably expecting the tablet to cost much more -- maybe even twice as much -- than the entry-level unit's $499 price tag. As it turns out, Apple stands to make $208 on every $499 iPad sold, giving the company headroom to drop the price if the market (and competition) dictates.
That's according to a bill of materials (BOM) analysis by Brian Marshall of BroadPoint AmTech. According to Marshall, individual parts inside Apple's 16GB Wi-Fi-only iPad adds up to $270.50, which includes a $10 line item attributed to manufacturing. Factor in another $20 for warranty service, and the bottom line comes to $290.50, leaving $208.50, or a nearly 43 percent profit margin.
"If [Marshall] is right, this shows that there's room going forward for Apple to reduce the price of the iPad," said Ezra Gottheil, an analyst with Technology Business Research. "I think the $499 price point is very aggressive, but if they dropped [the price] it would really put the iPad in the netbook range. At a lower price, consumers will have to decide waht they want for a portable work and play device, a netbook or get an iPad."
The profit margin's even wider on the 16GB iPad with Wi-Fi and 3G, which Marshall estimates runs the company $306.50 to produce but will sell for $629. The end result is a 52 percent profit, a number videogame console makers can only dream of.
3Com on Wednesday reported financial results for its fiscal 2010 second quarter ending November 27, 2009, and the results came as a bit of a surprise to Wall Street analysts. The company reported $322.2 million in second quarter revenue, compared to revenue of $354.6 million in the same quarter one year ago.
While that represents a drop of 9.1 percent, revenue increased sequentially to the tune of 10.9 percent, from $290.5 million. According to 3Com, revenue grew sequentially across all major sales regions, a feat the company attributes to a "solid recovery" in several international regions.
"We are pleased with 3Com's performance in the quarter," said Bab Mao, 3Com's Chief Executive Officer. "We exceeded our guidance for revenue, operating profit, earnings per share, and our cash balance, while delivering sequential revenue growth across all our sales regions and achieving record gross and operating margins."
3Com's net income in the quarter was $20.0 million, or $0.05 per diluted share, compared with net income of $12.9 million, or $0.03 per diluted share, in the same quarter one year ago.
Oracle didn't exactly stick it to Wall Street, but the world's No. 2 software maker did manage to post a quarterly profit above what analysts were expecting, eWeek reports. Not by a wide margin, mind you, but still 3 cents higher than the average Wall Street forecast of 36 cents per share.
The better-than-expected performance can be attributed to an unexpected increase in sales of new software licenses, which rose 2 percent from a year earlier in the second quarter ended Nov. 30. And it was just 3 months ago that Oracle said sales would probably be down 10 percent, or at best, fall flat.
Oracle wasn't the only one with reason to celebrate. The company's numbers has analysts and other vendors optimistic that technology spending is on the rebound after suffering through a rough year. Because of its size, Oracle reports earnings a month before most of its peers.