Earnings Analysis: 7 Tech Titan Stocks Investors Must Know
Markets are preparing for earnings season. Here’s your Cheat Sheet to the hottest earnings reports from stocks of the week.
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Verizon Communications (NYSE:VZ): The major telecomm player reported second quarter earnings this morning, swinging to a profit of $3.6 billion (57 cents per diluted share) in the quarter. The telecom services company had a net loss of $198 million or a loss of 42 cents per share in the year earlier quarter. Revenue rose 2.7% to $27.5 billion from the year earlier quarter. Verizon beat the mean analyst estimate of 55 cents per share. Analysts were expecting revenue of $27.43 billion. “In terms of earnings growth and the acceleration of revenue growth, this has been one of Verizon’s best quarters since the 2008 economic downturn,” said Chairman and CEO Ivan Seidenberg. “We expanded sequential margins in both our wireline and wireless businesses, and in the second half of the year we expect Verizon to build on this strong, positive momentum to continue to drive profitable, sustainable growth.” Seidenberg added: “We expect Verizon Wireless to gain share in the retail postpaid market and widen its network-quality lead throughout 2011. We also continue to see strong customer demand for FiOS Internet and TV, and for cloud and other strategic services. At the same time, we remain focused on our cost structure, as we deliver improvements in wireline margins quarter after quarter.” VZ stock is down -1.52% premarket.
AT&T Inc. (NYSE:T): The provider of wireless and telecommunications services and products reported its second-quarter earnings. Net income for the company fell to $3.59 billion (60 cents per share) vs. $4 billion (68 cents per share) a year earlier. This is a decline of 10.3% from the year earlier quarter. Revenue rose 2.2% to $31.5 billion from the year earlier quarter. AT&T beat the mean analyst estimate of 59 cents per share. Analysts were expecting revenue of $31.33 billion.“We delivered another strong quarter capping a solid first half of the year,” said Randall Stephenson, AT&T chairman and chief executive officer. “Mobile broadband growth continues to be robust, and we are seeing encouraging signs in wireline revenues. This adds to our confidence as we look ahead. Mobile broadband with IP infrastructure and cloud services are transforming our industry and are creating unprecedented opportunity. AT&T is strongly positioned to lead in this new era. Our planned acquisition of T-Mobile USA will accelerate development of next-generation capabilities, and it will lay the groundwork for continued high-tech innovation for years to come.”
Microsoft Corp. (NASDAQ:MSFT): The company, which develops, licenses and supports a range of software products and services for a variety of computing devices, reported net income above Wall Street’s expectations in the second quarter. Net income for Microsoft Corporation rose to $5.87 billion (69 cents per share) vs. $4.52 billion (51 cents per share) in the same quarter a year earlier. This marks a rise of 29.9% from the year earlier quarter. Revenue ose 8.3% to $17.37 billion from the year earlier quarter. MSFT beat the mean analyst estimate of 58 cents per share. Analysts were expecting revenue of $17.25 billion.
“Throughout fiscal 2011, we delivered to market a strong lineup of products and services which translated into double-digit revenue growth, and operating margin expansion,” said Peter Klein, chief financial officer at Microsoft. “Our platform and cloud investments position us for long-term growth.”
eBay (NASDAQ:EBAY): The internet company, which together with its subsidiaries provides online marketplaces for the sale of goods and services, along with other online commerce platforms, online payment solutions and communication offerings, reported a drop in second quarter profit, down from the previous year. Net income fell to $283.4 million (22 cents per share) vs. $412.2 million (31 cents per share) a year earlier. This is a decline of 31.2% from the year earlier quarter. Revenue rose 24.6% to $2.76 billion from the year earlier quarter. EBAY reported adjusted net income of 48 cents per share. By that measure, the company beat the mean estimate of 39 cents per share. It beat the average revenue estimate of $2.61 billion. EBAY shares are down 1.78% today in after-hours trading.
“Second quarter revenue and earnings were strong, with PayPal surpassing 100 million active registered accounts and reporting its first billion-dollar revenue quarter, and eBay growth in the U.S. accelerating,” said eBay Inc. President and CEO John Donahoe. “We also strengthened our portfolio in Q2 with acquisitions that we believe will more broadly position us to enable the future of commerce. We will partner with retailers of all sizes to help them grow in a rapidly shifting, technology-driven multichannel commerce environment, and we will help consumers shop and pay anytime, anywhere, any way.”
Intel Corporation (NASDAQ:INTC): The developer of advanced integrated digital technology products reported net income above Wall Street’s expectations for the second quarter. Net income for Intel Corporation rose to $2.95 billion (54 cents per share) vs. $2.89 billion (51 cents per share) in the same quarter a year earlier. This marks a rise of 2.3% from the year earlier quarter. Revenue rose 21.1% to $13.03 billion from the year earlier quarter. INTC reported adjusted net income of 59 cents per share. By that measure, the company beat the mean estimate of 51 cents per share. Analysts were expecting revenue of $12.82 billion. INTC shares are down 1.48% today in after-hours trading.
“We achieved a significant new milestone in the second quarter, surpassing $13.0 billion in revenue for the first time,” said Paul Otellini, Intel president and CEO. “Strong corporate demand for our most advanced technology, the surge of mobile devices and Internet traffic fueling data center growth, and the rapid rise of computing in emerging markets drove record results. Intel’s 23 percent revenue growth in the first half and our increasing confidence in the second half of 2011 position us to grow annual revenue in the mid-20 percent range.”
EMC Corporation (NYSE:EMC): The company, which delivers and supports a range of information infrastructure technologies and solutions, reported net income exceeding Wall Street’s expectations for the second quarter. Net income for EMC Corporation rose to $546.5 million (24 cents per share) vs. $426.2 million (20 cents per share) in the same quarter a year earlier. This marks a rise of 28.2% from the year earlier quarter. Revenue rose 20.4% to $4.85 billion from the year earlier quarter. EMC reported adjusted net income of 35 cents per share. By that measure, the company beat the mean estimate of 27 cents per share. It beat the average revenue estimate of $4.73 billion. Shares are down 0.44% today in after-hours trading.
“Our record-setting performance during the quarter was marked by balanced growth, solid execution and significant technology innovation as customers around the world continue to embrace EMC’s cloud computing and Big Data strategies,” said Joe Tucci, EMC Chairman and Chief Executive Officer. “It is our firm belief that this strategy is well-placed and underpinned with winning products and services and strategic partners. We remain confident in our ability to continue delivering strong results this year and over the long term. Furthermore, we remain committed to investing heavily to extend our technology lead and help customers and service provider partners accelerate their IT and business model transformations.”
IBM (NYSE:IBM): The leading information technology and computer systems company reported its second quarter results yesterday. Net income for IBM rose to $3.66 billion ($3 per share) vs. $3.39 billion ($2.61 per share) in the same quarter a year earlier. This marks a rise of 8.2% from the year earlier quarter. Revenues also jumped 12.4% to $26.67 billion from the year earlier quarter. The company reported adjusted net income of $3.09 per share. By that measure, it beat the mean estimate of $3.01 per share. It beat the average revenue estimate of $25.35 billion. CEO Samuel J. Palmisano added, “In the second quarter our long-term strategic investments in the company’s growth initiatives again helped drive strong revenue performance. Hardware, software and services revenue grew at double digits, and we achieved strong profit and free cash flow growth.” IBM stock is up 1.67% premarket.
Competitors to Watch: Oracle Corporation (NASDAQ:ORCL), Hewlett-Packard Company (NYSE:HPQ), Microsoft Corporation (NASDAQ:MSFT), Cisco Systems, Inc. (NASDAQ:CSCO), Intel Corporation (NASDAQ:INTC), Dell Inc. (NASDAQ:DELL), Apple Inc. (NASDAQ:AAPL), EMC Corporation (NYSE:EMC), SAP AG (NYSE:SAP), and Sybase, Inc. (SY).
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