Tech Business Review: Apple’s Results SCRUTINIZED, Netflix IMPLODES

Here are Wednesday’s top stories:

Microsoft Corporation (NASDAQ:MSFT) is being said by observers to be paying a new attention to detail, no matter how Windows 8 will be received. The firm reports that it’s utilizing a wide range of techniques to enhance Windows 8’s graphics performance by 2 to 5 times that of comparable Windows 7 hardware. Everything from a high definition video to text rendering is covered in the claim, which might not herald good news for graphics chip vendors Nvidia Corporation (NASDAQ:NVDA) and AMD, since it might induce more mainstream PC users to consider that integrated graphics are good enough.

Analysts are bearing down (no pun intended – maybe) on Apple’s (NASDAQ:AAPL) Tuesday afternoon results. Bill Shope at Goldman commented that “Our sense is that Apple’s management spent more time discussing macro pressures than in any other quarter over the past decade.” Shope also disliked the size of the iPhone slowdown and Apple’s fall in its gross margin, although he predicts that margins will bounce back in the iPhone-loaded December quarter. In the meantime, he reduces his price target to $790 but keeps his Buy. Other analysts have defended Apple, and say that investors might look ahead to the next-gen iPhone and iPad Mini. William Blair mentions that the shares trades at only 9 times the fiscal year 2013’s earnings per shares estimate (excluding cash). Sterne Agee keeps a $780 price target, but is concerned that the new iPad’s retina display is affecting profits.

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Shares of Netflix, Inc. (NASDAQ:NFLX) were down about 25 percent in late afternoon, following word that the company’s second quarter DVD subscriber losses exceeded its domestic streaming gains, plus its guidance for a 1 million to a 1.8 million third quarter rise in domestic streaming subscribers that makes full-year guidance for 7 million additions appear unlikely. In addition, the firm’s guidance for another 600,000 to 900,000 DVD losses was also worrying. In spite of all this, Netflix contends that it’s driven to move into continental Europe, even if such a push wipes out near-term profits.

Amazon.com, Inc. (NASDAQ:AMZN), is selling off ahead of Thursday’s second quarter report. The company’s Euro exposure is weighing on many investors, as are Kindle sales plus the impact of the state sales tax collections problem. Citi maintain its Buy, and believes that investors should focus on Amazon’s potential to double its share of domestic online retail during the next decade. Nomura forecasts that the company will post another quarter of margin improvements, as it collects the benefits from giant warehouse investments.

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