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Thursday, January 27, 2011

Microsoft Reports Record Earnings per Share in Q4 (Financial Charts, Review) *Lower gross margin only negative* MSFT

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Microsoft reported Q4 2010 financial results on Thursday, January 27, 2011


Microsoft Reports Record Earnings per Share in Q4

Microsoft (MSFT) reported Q4 2010 financial results on Thursday, January 27 after the market closed. Microsoft financial performance charts for Q4 2010 and prior quarters have been posted, along with commentary, on the Microsoft Financial Performance page. The charts are:

Microsoft Performance by the Quarters
Earnings per Share, Operating Cash Flow per Share
Total Revenues, Operating Income, and Net Income
Gross Margin, Operating Margin, and Net Margin
Return on Assets
Total Revenues and Earnings per Share Growth Rates

Microsoft Summary Q4 2010 A lower gross margin prevented Microsoft from a total blowout quarter in Q4 December 2010. Even so, Microsoft reported record total revenues and record earnings per share. Operating expenses were reasonable. A higher Other Income amount and lower effective tax rate made up some of the lower gross profit to maintain a strong net income margin and impressive earnings per share.

Microsoft Income Statement Calendar Q4 2010 Microsoft reported record total revenues of $19.95B, near-record net income of $6.6B, and record earnings per share of $0.77. From the prior calendar quarter Q3 2010, total revenues were up +23.20%, net income up +22.62%, and earnings per share up +24.19%. Compared to the prior calendar year Q4 2009, these were +4.89%, -0.42%, and +4.05%, respectively. For Q4 2010, gross margin decreased to 75.78%, a multi-year low, from the historical 80%. Operating margin dipped QoQ to 40.92% from 43.94%, even though operating expenses were reasonable. Net margin of 33.25% was on pace with the prior Q3 2010 of 33.41% as a higher Other Income and lower effective tax rate made up for the lower gross profit margin. Cash flow from operations per share dropped to $0.49 from the prior Q3 2010 of $0.94. Most of the drop in cash flow was attributable to an increase in accounts receivable.

Microsoft Balance Sheet Calendar Q4 2010 Total assets increased QoQ +0.84% to a record $92.3B from the prior quarter of $91.5B. The capital to assets ratio (total stockholders' equity divided by total assets) increased QoQ to 52.52% from Q3 2010 of 51.28%. The current ratio (current assets divided by total assets) is a very liquid 64.66%, which is within historical levels. Microsoft is very liquid with strong capital and has $41B+ in cash reserves (cash, cash equivalents, and marketable securities).

Microsoft Business Outlook Microsoft reaffirms operating expense guidance of $26.9 billion to $27.3 billion for the full year ending June 30, 2011.


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Wednesday, January 26, 2011

VMware Reports Record Earnings in Q4 (Financial Charts, Review) *Outlook disappoints* VMW

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VMware reported Q4 2010 financial results on Monday, January 24, 2011


VMware Reports Record Earnings in Q4

VMware (VMW) reported record setting Q4 2010 financial results on Monday, January 24 after the market closed. VMware financial performance charts for Q4 2010 and prior quarters have been posted, along with commentary, on the VMware Financial Performance page. The charts are:

VMware Performance by the Quarters
Earnings per Share (Diluted), Operating Cash Flow per Share
Total Revenues, Operating Income, and Net Income
Gross Margin, Operating Margin, and Net Margin
Return on Assets
Total Revenues and Earnings per Share Growth Rates
 
Summary Q4 2010 VMware reported record total revenues and net income and overall impressive Q4 2010 financial results. Management outlook for 2011 operating margin, no increase, due to increase in hiring, is a disappointment. Although management outlook is a strong 26%-29% increase in 2011 total revenues, another disappointment is the Q1 2011 management outlook for total revenues ($800M-$820M), which is a decline from the Q4 2010 total revenues of $836M. The only true negative on VMware is the historically low return on assets, although much improved in recent quarters, which continues below 10%.

Income Statement Q4 2010 VMware reported record total revenues of $836M, record net income of $131M, and earnings per share of $0.29. From the prior quarter Q3 2010, total revenues were up +17.00%, net income up +41.70%, and earnings per share up +40.00%. From the prior year Q4 2009, these were up +37.40%, +112.52%, and +100.00%, respectively. For Q4, gross, operating, and net margins were an improved 83.20%, 15.63%, and 14.35%, respectively. Cash flow from operations was a much improved and record $0.95 per share.

Balance Sheet Q4 2010 Total assets increased +12.06% QoQ to a record $6.797B. The capital to assets ratio (total stockholders' equity divided by total assets) dipped to 56.03%, a 4-quarter low but still historically strong. The current ratio (current assets divided by total assets) is a very liquid 63.23% and a 6-quarter high. VMware is very liquid with strong capital. Q4 total deferred revenue increased $355M and +23.54%, which is a huge QoQ increase. However, company guidance for Q1 2011 total revenues is in the $800M - $820M range, a QoQ negative growth rate of -4.27% to -1.87%.

Our Estimate Q4 2010 VMware beat our estimates. "VMware offered guidance for Q4 December 2010 total revenues of $790M to $810M, a QoQ growth rate of +10.6% to +13.4%. For the present, our early estimate of the Q4 EPS is a minimum $0.22 compared to Q3 EPS of $0.20, a +10.0% increase. Disclosure: We have no position, long or short, in VMW."

Our Estimate Q1 2011 VMware offered guidance for Q1 March 2011 total revenues of $800M to $820M, a QoQ negative growth rate of -4.27% to -1.87%. For the present, our early estimate of the Q1 2011 EPS is a minimum $0.25 compared to Q4 2010 EPS of $0.29, a -15.15% decrease.

Disclosure We have no position, long or short, in VMW.


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Thursday, January 13, 2011

Intel Reports Excellent Q4 Financial Results (Financial Charts & Review) *EPS $0.59* INTC

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Intel reported Q4 2010 financial results on Thursday, January 13, 2011


Intel Reports Excellent Q4 2010 Financial Results

Intel (INTC) reported record setting Q4 2010 financial results on Thursday, January 13 after the market closed. Intel financial performance charts for Q4 2010 and prior quarters have been posted, along with commentary, on the Intel Financial Performance page. The charts are:

Intel Performance by the Quarters
Earnings per Share (Diluted)
Total Revenues, Operating Income, and Net Income
Gross Margin, Operating Margin, and Net Margin
Return on Assets
Geographic Revenues
Total Revenues and Earnings per Share Growth Rates

Intel's Q4 2010 financial results were excellent, show ongoing improvement from the depths of the Great Recession, and now are at record-setting heights. Intel's 2011 guidance, business outlook, has been posted on the Intel Financial Performance page.

Income Statement Q4 2010 Intel continues upwards with a record $11.457 billion total revenues, $3.388 billion net income, and $0.59 earnings per share (diluted). Total revenues were up a beat of +3.2%, net income up a strong +14.7%, and earnings per share up a beat of +13.5% from the prior quarter Q3 September 2010. More impressive was total revenues were up +8.4%, net income up +48.5%, and earnings per share up +47.5% from prior year Q4 December 2009. The Q4 gross margin of 67.47% was a multi year high, probably a record. The Q4 operating margin of 37.94% was a multi year high, probably a record. The Q4 net margin of 29.57% was a multi year high, probably a record.

Balance Sheet Q4 2010 Total assets have reached an all-time high of $63.138 billion, after dipping as low as $48.5 billion in Q1 2009. The current ratio, current assets / total assets, is 49.99% and the highest in recent quarters. Intel is very liquid and well capitalized. Capital to assets, total stockholders' equity / total assets, is 78.62% which is the normal range for Intel (75% to 80%).


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Sunday, January 9, 2011

Earnings Season Starts! (Videos) *Alcoa, Intel, JPMorgan report financial results this week*

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Earnings season begins with Alcoa on Monday, January 10, 2011 after market close


Earnings Season Starts!

Alcoa (AA) will report Q4 2010 financial results after the market close on Monday, January 10, 2011 to kick off earnings season. Intel (INTC) reports on Thursday after market close and JPMorgan Chase (JPM) reports on Friday before market open.

In the first video below by Financial News Online, the earnings season calendar and economic calendar are listed. In the second video below by CNBC Fast Money, Louis Navellier says the market is becoming overbought and the year over year (YoY) earnings comparisons are getting tougher as companies rebound from the Great Recession. Which companies will continue strong earnings momentum through the economic recovery should be revealed during this earnings season. Navellier's top 3 earnings plays for strong earnings reports are BorgWarner (BWA), F5 Networks (FFIV), and Illumina (ILMN). Navellier likes the technology sector for continuing earnings momentum.

Financial News Online "The Week Ahead: January 10th - 14th" Earnings season kicks off next week with the traditional release of Alcoa's earnings on Monday after the close. Education company Apollo Group also reports earnings on Monday; followed by homebuilder Lennar Corp and supermarket chain SUPERVALU on Tuesday. Technology bellwether Intel reports on Thursday along with Comverse Technology. Finally, bank starts kick off earnings with JPMorgan Chase reporting results on Friday. The economic calendar is also quite full next week with Wholesale Inventories being released on Tuesday; the Import Price Index and the Fed's Beige Book due out on Wednesday; and Reports on Initial Jobless Claims, PPI, and the Trade Balance will be released on Thursday. Lastly, Friday is a big day of data with the CPI, Retail Sales, Industrial Production, Capacity Utilization, consumer confidence, and Business Inventories all being released Friday morning.


Fast Money (CNBC) "Take Your Position" An Alcoa and earnings season outlook, with Louis Navellier & Associates.



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