Apple, Microsoft, Yahoo and IBM all posted their latest financial results this week, showing mixed fortunes but oddly the same market reaction.
First up, Apple. As expected, Apple earned bucketfuls of cash in its most recent quarter, with more money thrown at it than at a Greek wedding before the country went bust.
On the back of $50bn in revenue, a whopping 33 percent rise mostly helped by iPhone sales, Apple generated over $10bn of profit from April to June, up from $7.7bn in the same quarter a year ago.
The firm's continuing good fortunes also helped Apple generate a cash pile of over $200bn in the bank, probably enough to pay off the Greek debt if it felt like being generous and owning the rights to a Mediterranean country.
Apple chief executive Tim Cook must have looked over those numbers and thought he was in for a pretty smooth ride, even taking the unusual step of not divulging sales figures for the Apple Watch, risking criticism and suspicion that the smartwatch is underperforming.
Cook had previously explained that Apple would be classing Apple Watch sales under its ‘Other Products' category, in with the iPod and accessories. But I'd bet that if sales of the smartwatch were in line or above market forecasts - somewhere around three to five million - the CEO might have decided to give a better indication of Apple Watch sales.
Apple Watch mystery aside, when you have a 33 percent sales increase, $50bn in revenue for three months and $200bn in the bank you're sitting pretty, right? Wrong. Investors reacted badly to Apple's results, wiping $60bn off the firm's value.
This wasn't due to anything intrinsically wrong with the firm's results or its business model; it was just that Apple sold slightly fewer iPhones than analysts had predicted.
The firm shifted 47.5 million iPhones in Q3, a 35 percent gain, but this was lower than expectations of 48.8 million shipments. And while the company forecast Q4 revenue of $49bn to $51bn, this was under the average estimate of $51.1bn.
Microsoft didn't fare much better with its most recent earnings, released on the same day as Apple's.
The Redmond firm posted its biggest ever loss of $3.2bn, precipitated by a huge Nokia-associated $8.4bn write down. Despite the big loss, Microsoft exceeded analyst expectations - although these weren't exactly optimistic - thanks mainly to a jump in sales of the Surface and Xbox.
So here we have a firm that made a huge loss, but still managed to outperform the experts' guidance - and its shares fell almost four per cent. The drop was attributed to investors not having faith in Microsoft's ability to exploit newer areas like the cloud to counter declines in its more traditional business lines.
Yahoo told a similar story to Microsoft's, with shares down more than two percent after missing certain targets. Yahoo made a loss of $22m in Q2, a huge decline compared with its $270m profit in the same period in 2014. Revenue was actually up 15 percent to $1.24bn, beating expectations of $1.03bn, but Yahoo had a dimmer forecast for Q3, predicting sales of $1.04bn, lower than the $1.07bn target. Sell, sell, sell!
IBM reported its results on Monday, following the same pattern as Yahoo's. Big Blue's shares fell 4.5 percent on the back of lower-than-expected revenue for the quarter. IBM reported profits of $3.4bn off the back of $20.8bn in sales, down 13.5 percent from the same quarter last year and slightly under the $20.9bn expected. This was IBM's 13th consecutive fall in revenues.
And then bucking the trend, there was Google. The web giant pipped its key tech rivals to the post by announcing its results last week.
Google raked in $17.7bn from April to June this year, up 11 percent from $16bn during the same period last year. This generated a profit of $3.93bn, up 17 percent from $3.35bn. The profit figure beat forecasts for the first time in the past six quarters, leading to a rise in share price of 12 percent.
So why can't investors get enough of Google, yet they're fleeing in horror from all the other big tech vendors out there? It can't be because the web behemoth beat expectations, as so did Microsoft, and Yahoo in some areas; it can't be because Google dramatically increased profit and revenues, as Apple outperformed its rival in both those areas.
But one thing Google has, which the others lack, is a new CFO. Ruth Porat
joined Google in May, and has come in with very loud promises to wield the sword through rising costs.
This has caused valid concerns that Porat's approach could stop Google innovating, a trait for which the firm is renowned and which has helped it reach its dominant position today. However, from what Porat said, it's unlikely she'll be doing any more than the previous Google CFO did - asking executives to prioritise new projects based on potential RoI rather than just pulling them out of a hat.
Even though projects like Google Plus and Glass have fallen off the radar, both have valid business models behind them, and it's unlikely they got millions of pounds of investment just on a whim.
Room to innovate is key for the technology industry, more than any other. With products like Windows, the PC and the iPhone, firms like Microsoft, IBM and Apple have all transformed the way we live and do business - regardless of whether the innovation was truly theirs, or they had the tenacity to push through with a new idea 'borrowed' from another party.
If all it takes to get investors on board and tame the fickle market is to hire a new CFO who refers to the book of management speak on their first conference call, I suggest Martin Schroeter, Ken Goldman and Luca Maestri start looking for new jobs soon so we can continue to benefit from technology advances.
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