Which Tech Titan Stocks had the Strongest Earnings this Week? Apple, Google, Microsoft, IBM or Netflix?

Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

Stocks with improving earnings metrics are worthy of your extra attention. Click here to discover our CHEAT SHEET stock picks now!

Here’s your Cheat Sheet to how the top 5 tech titan stocks rank via earnings trends from this week:

Apple Inc. (NASDAQ:AAPL): Current Price $439.88

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 37,490 42,900 65,220 108,250 156,510
Diluted EPS ($) 6.78 9.08 15.15 27.68 44.15

These annual results from Apple are the stuff of corporate folklore. In five years, revenue quadrupled and EPS jumped 6.5 times. The company’s shareholders were surely happy.

Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012 Dec. 31, 2012
Revenue ($) in millions 46,330 39,190 35,020 35,970 54,510
Diluted EPS ($) 13.87 12.30 9.32 8.66 13.81

Interestingly, Apple’s quarterly results from December 2011 through September 2012 were on the decline — but that’s mostly due to industry cyclicality. Revenue fell 22% and EPS cratered over 60% during this period. It’s another matter that revenue and EPS headed for the moon in the last quarter of 2012, but it’s a lower number year-over-year.

International Business Machines Corp. (NYSE:IBM): Current Price $204.97

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 103,630 95,760 99,870 106,920 104,510
Diluted EPS ($) 8.89 10.01 11.52 13.06 14.37

IBM’s growth in revenues have not been able to keep pace with the splendid growth in its EPS, which has improved every year from 2009 onward.

Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012 Dec. 31, 2012
Revenue ($) in millions 29,490 24,670 25,780 24,750 29,300
Diluted EPS ($) 4.56 2.61 3.34 3.33 5.13

In the last quarter IBM certainly hit the ball out of the park – revenue up 18% and EPS better by 54%. Watch out for this stock…

Microsoft (NASDAQ:MSFT): Current Price $27.88

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 60,420 58,440 62,480 69,940 73,720
Diluted EPS ($) 1.87 1.62 2.10 2.69 2.00

Nice revenue growth here. EPS was doing well until 2012, when it seems to have hit a roadblock.

Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012 Dec. 31, 2012
Revenue ($) in millions 20,880 17,410 18,060 16,010 21,460
Diluted EPS ($) 0.78 0.60 -0.06 0.53 0.76

A rather unimpressive set of quarterly numbers, marked by erratic revenue and EPS. We need to look elsewhere…

Google Inc. (NASDAQ:GOOG): Current Price $753.67

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 21,800 23,650 29,320 37,900 50,180
Diluted EPS ($) 13.31 20.41 26.31 29.76 32.31

We like these solid results from Google with both revenue and EPS improving every year since 2009.

Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012 Dec. 31, 2012
Revenue ($) in millions 10,580 10,640 12,210 14,100 14,420
Diluted EPS ($) 8.24 8.75 8.42 6.53 8.62

These quarterly results are marked by a consistent growth in revenue, but a more or less static EPS ¬†number, except for the aberration in the September 2012 quarter…

Netflix, Inc. (NASDAQ:NFLX): Current Price $169.56

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 1,365 1,670 2,163 3,205 3,609
Diluted EPS ($) 1.32 1.98 2.96 4.16 0.29

We see decent revenue growth every year after 2009 accompanied by better EPS numbers until 2011. But EPS cratered in 2012, and is a matter for concern.

Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012 Dec. 31, 2012
Revenue ($) in millions 875.57 869.79 889.16 905.09 945.24
Diluted EPS ($) 0.63 -0.08 0.11 0.13 0.13

Focusing on the quarterly results, revenue has grown in the last three periods. However, EPS — after that disastrous March 2012 quarter — has improved but essentially remained flat.

Conclusion

IBM stands head-and-shoulders above its peers in this¬†“E-Squared” investment analysis of the heavies in the tech sector. Its earnings momentum across both the annual and quarterly time frames is unmatched at this time.

“E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our successful CHEAT SHEET investing framework. Don’t waste another minute – click here to discover our CHEAT SHEET stock picks now!