Microsoft
Microsoft, the worlds largest software maker, said sales fell 17 percent last quarter to $13.1 billion, more than $1 billion short of the average estimate in a Bloomberg survey of analysts. The stock sank as much as 8.8 percent.
After Intel Corp. and International Business Machines Corp. topped estimates this month, some shareholders had expected Microsoft to do the same, said Michael Holland, who oversees more than $4 billion at Holland & Co. in New York. Instead, revenue fell in all five of Microsofts business units, contributing to the first annual sales drop in its 23-year history as a public company.
“They were ugly numbers and particularly unfortunate given IBMs relatively positive backdrop,” Holland said. The recession continues to hit sporadically and nastily.
Microsofts shares had risen 11 percent since July 14, when Intel reported a smaller sales decline than analysts predicted. IBM topped estimates for second-quarter earnings last week and posted a smaller sales decline in its software unit than Microsoft. Apple Inc. also beat estimates, boosted by demand for the iPhone and Macintosh computer.
Lift Our Game
“We need to lift our game to another level,” Chris Liddell, chief financial officer of Redmond, Washington-based Microsoft, said on a conference call.
Amazon.com, the largest Internet retailer, reported a 10 percent decline in second-quarter profit and posted less revenue than analysts had estimated. Discounts and free shipping failed to drive enough growth to satisfy investors.
Amazon.coms stock declined as much as 9.7 percent to $84.73 after its earnings were released.
Net income fell to $142 million, or 32 cents a share, from $158 million, or 37 cents, a year earlier, the Seattle-based company said. Sales rose 14 percent to $4.65 billion. Analysts surveyed by Bloomberg had projected profit of 32 cents and sales of $4.7 billion.
Amazon.com has tried to fend off competitors with discount offers and new kinds of products, such as low-cost laptops and outdoor equipment. Its low prices and free-shipping promotions have started to eat into profit, said Aaron Kessler, an analyst at Kaufman Brothers LP in San Francisco.
EBay Shines
Investors expected Amazon.com to outperform its e-commerce rival, Kessler said. The shares have risen 83 percent this year, versus 54 percent for EBay.
“After EBays results, people expected more from Amazon,” Kessler said.
Earnings reports are giving mixed signals about a recovery, said technology investor Michael Cuggino, who helps oversee $3.8 billion at Pacific Heights Asset Management LLC in San Francisco.
“For every ho-hum number, you are seeing one where conditions are improving,” he said. “Its consistent with the economy bouncing around the bottom.”
Juniper Networks Inc., the second-largest maker of networking equipment, plunged as much as 9.6 percent in late trading after its gross margin missed the companys projections. Juniper, based in Sunnyvale, California, said its waiting for phone carriers to renew network upgrades.
“Its a question when well see the uptick,” Chief Executive Officer Kevin Johnson said in an interview yesterday.
Broadcom Results