Yahoo's Santa Monica location. The company missed earnings expectations today for its second quarter.
Yahoo just named a new CEO — Google veteran Marissa Mayer — but on the day she was supposed to start work, the company also announced second-quarter earnings, and they missed expectations by $0.02 a share. Wall Street wanted $0.20 per share and got $0.18. But Yahoo still made money: about $227 million, down from a year ago, a profit nonetheless.
The Wall Street Journal cut to the chase ("GAAP" is an accounting term — it's best to favor the GAAP and discount the non-GAAP, but non-GAAP can provide a sense of how much raw profits is coming in the door):
The numbers are sort of a split decision. A beat on a non-GAAP basis, a bit low on a GAAP basis, revenue a little light. That lack of growth or traction crystallizes the sort of stagnation that’s captured Yahoo for several years now. Mayer has her work cut out for her.
JEFF PACHOUD/AFP/Getty Images
Customers test new the IPad at an Apple store. Apple beat quarterly earnings expectations today by a very decent margin.
If you've been hiding in your bomb shelter, you probably missed Apple's precipitous stock-price drop last week and this, bottoming at $560 per share today and giving up, like, $100 billion in market cap. But then the magic of shattered earnings expectations hit and hit HARD. The company made $11.6 billion in its second fiscal quarter and earned $12.30 per share. That killed the expectation of $10.06 per share, according to Business Insider.
More importantly, the "weakness" in iPhone sales didn't materialize — Apple sold 35.1 million, nearly five million more than expected. This was one of the possible negatives driving Apple share price down, as analysts speculated on what remains the core of Apple's business.
There is a hint of bad news amid all this boffo good news, which has pushed Apple right back up to $600 per share in after-hours trading (a whopping 7.35-percent increase). The theoretically revolutionary iPad sold "only" 11.8 million units, below the 13 million that were anticipated.
Kevork Djansezian/Getty Images
Chairman and CEO Dr. Paul E. Jacobs of Qualcomm delivers a keynote address at the 2012 International Consumer Electronics Show. The company beat earnings expectations for its fiscal second quarter but disappointed on guidance for the rest of the year.
Qualcomm, perhaps the most important technology firm in San Diego (market cap: $113 billion), turned in a great fiscal second quarter performance, beating expectations. Revenue, earnings per share, the whole shebang — all well up. The company has been on a tear at the beginning of the year. Personally I am greatly enjoying the performance of its Snapdragon processor on my new BlackBerry Bold. But then Qualcomm had to go and make investors nervous about the future of its business...
Since the company reported quarterly revenue and earnings that were ahead of analysts' expectations, investors were perplexed over why the company was not able to raise its financial targets for the full year.
Bernstein analyst Stacy Rasgon said the company's forecast for third quarter chip shipments of 144 million to 152 million was below his expectation for 157 million. He said that many on Wall Street had hoped it would raise financial targets for 2012.
ANTONY DICKSON/AFP/Getty Images
A participant wearing a mask of Apple CEO Steve Jobs and holding a model of an Ipad takes part in a protest against Taiwanese technology giant Foxconn, which manufactures Apple products in China, outside an Apple retail outlet in Hong Kong on May 7, 2011.
Investors are justified in being confused about why Apple has seen its shares completely hammered off their highs of $644 this week, at one point plunging as low as $575. It's all they've been talking about on CNBC.
There isn't really a good single explanation. So here are three:
• Apple is being sued by the Department of Justice and could be facing a revolt among wireless carriers. I've blogged about the former. On the latter, the likes of Verizon and AT&T currently cover much of the cost of iPhones in their wireless plans. This has enabled Apple to extract their profits, narrowing the providers' margins, while bolstering Apple's 30-percent margins, the thing that undergirds the stock price. If that comes to an end, then Apple won't be able to support a possible $1-trillion market cap on a more reasonable profit-margin model.
Kimihiro Hoshino/AFP/Getty Images
The Google logo is seen at the Google headquarters in Mountain View, California.
Google just announced first-quarter earnings, and they were solid, beating expectations and quickly reversing a negative trend from last quarter, when Google missed expectations. But what's more important is an announcement that, like Apple, Google is planning to return some of its rather large cash hoard to investors. And what's interesting is how Google intends to do it.
[UPDATE: A commenter, "Finance Gourmet," points out that this isn't a return of cash to shareholders, but the creation of a new class of non-voting stock distributed as a dividend. Correct! I thought Google was going to underwrite these shares out of cash, but on that front I was...confused! by the Drummond note. In fact, this whole thing is really more about retaining voting control of the company than it is about dealing with the cash issue. However, it is a reward or sorts for shareholders.]