Saturday, August 25, 2012

Big Tech Assets Rise, Apple Reaches Record $163 Billion



Total Assets

The Largest USA Tech Companies have reported all-time high aggregate total assets of $917 billion. This is a net increase of +$32 billion and +4% from the prior quarter. Apple led the way, and continues pulling away, with another incredible +$12 billion quarterly increase, followed by Google (+$9 billion), and Oracle (+$4 billion). The only decrease was reported by IBM (-$1.5 billion).

The $100 Billion Club: For the latest quarter reported, Apple continues #1 and largest at $162.9 billion. HP continues in second at $127.7 billion, followed by #3 Microsoft at $121.3 billion. IBM is #4 at $113.8 billion. Cisco is #5 at $91.2 billion. The next group is #6 Google at $86.1 billion, #7 Oracle ($78.3 billion), and #8 Intel ($72.4 billion). Qualcomm is a more distance #9 ($42.4 billion). Amazon is last and #10 at $21.0 billion. I have included Amazon because of the Kindle Fire, streaming, cloud services, and the resulting competition with others listed.



Capital Ratio

The Largest USA Tech Companies have reported an average capital to assets ratio of 54.18%, a slight decrease of -0.45% from the prior quarter. Six of the ten companies reviewed reported increases, led by Intel (+2.3%) and HP (+1.4%). Google reported the largest decrease (-4.8%) followed by Microsoft (-3.5%).

For the latest quarters reported, Qualcomm (77%) has surpassed Google (75%) to have the strongest capital position. Apple is #3 at 69%, followed closely by Intel at 67%. Next are CiscoOracle, and Microsoft at 56%, 56%, and 55%, respectively. Amazon is 8th at 36%, followed by HP (33%) and finally IBM (18%) is last and #10.



Status
Updated through Amazon quarterly financial results reported 7-26-12
Next reports: Cisco (August 15), HP (August 22)

Largest USA Tech Companies Earnings Plunge, But Apple Still Dominates

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Saturday, August 18, 2012

Largest USA Tech Companies Earnings Plunge, But Apple Still Dominates



Quarterly Net Income

The Largest USA Tech Companies have reported quarterly aggregate net income of $26.3 billion, which is lower than the prior quarter $33.9 billion. This is a sequential QoQ decrease of -$7.68 billion and -23%. Six of the ten companies reviewed reported a QoQ decrease in net income. The net decrease is not too unusual or unexpected as the second quarter of the calendar year is typically a slower financial performance on an annual cyclical basis. The largest sequential QoQ increases were Oracle (+$953 million) and IBM (+$816 million) and HP (+$125 million). The largest sequential QoQ decreases were by Microsoft (-$5.60 billion), Apple (-$2.80 billion), and Qualcomm (-$1.02 billion).

For the latest quarters reported, Apple continues dominating with an incredible $8.82 billion quarterly net income. Second was IBM at $3.88 billion and third was Oracle at $3.45 billion, combined less than half of Apple. The rest of the pack follows with #4 Intel at $2.83 billion, #5 Google at $2.79 billion, #6 Cisco at $2.17 billion, #7 HP at $1.59 billion, and #8 Qualcomm at $1.21 billion. Trailing are #9 Amazon at a mere $7 million and #10 Microsoft at a dismal net loss of -$492 million. I have included Amazon because of the Kindle Fire, streaming, cloud services, and the resulting competition with others listed. Apple comprises approximately 34% of the total quarterly net income of the 10 tech companies listed!



Return on Assets

The Largest USA Tech Companies have reported an average return on assets of +13.45%, a multi-quarter low and -1.13% decrease from the prior quarter of +14.58%. Eight of the ten companies reviewed reported decreases. Amazon and HP dragged the average down the most. The 2 sequential QoQ increases were Cisco (+0.24%) and IBM (+0.17%). The largest sequential QoQ decreases were Microsoft (-6.42%), Apple (-2.08%), and Amazon (-1.00%).

For the latest quarters reported, Best of Breed goes to Apple with a commanding and incredible lead of at +29.70% ROA. Apple is distantly followed by Intel (+17.61%), Qualcomm (+15.26%), and Google (+15.02%). Next are #5 Microsoft (+14.95%), #6 IBM (+14.30%), and #7 Oracle (+13.38%). Significantly lagging the field are #8 Cisco at +8.36% and #9 HP at a much lower +4.12%. Retail-oriented Amazon is last and #10 at a sinking +1.82%.



Updated through Amazon quarterly financial results reported 7-26-12
Next reports: Cisco (August 15), HP (August 22)

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Tuesday, August 14, 2012

Rackspace Earnings Review: Solid Quarter!


Rackspace reported QE June 2012 financial results on August 7

This was a solid quarter for Rackspace, reporting record quarterly revenues, operating income, net income, and gross margin. Earnings per share of $0.18 matched the QE 12-31-11 all-time high. Cash flow per share, operating margin, and net margin were second only to the record QE 12-31-11.

Both net revenues and earnings per share met the analysts' estimates. The next 2 quarters, the QE 9-30-12 and the QE 12-31-12, are expected to push the bar even higher to record revenues, net income, and earnings per share. Long-term growth, the YoY increase, is slowing but continues very strong, for both revenues and earnings per share. See chart further below.

Financial Result, QoQ Change, YoY Change
Total Assets: $1.14 billion, +5%, +28%
Net Revenues: $318.99 million, +6%, +29%
Net Income: $25.13 million, +8%, +43%
Earnings per Share: $0.18, +6%, +38%













“At the halfway point in the year, we have made a lot of progress on our plans to broaden our product and services portfolio while simultaneously managing a rapidly growing business. Keep your eyes open for more product announcements in the coming weeks and we look forward to updating you on our progress in November,” said Karl Pichler, chief financial officer.

“Last week we achieved a significant milestone in our 2012 plan by launching Cloud Servers powered by OpenStack. This new offering embeds the latest version of the OpenStack software to combine the on-demand scalability of modern cloud infrastructure with the flexibility benefits of open source technology. This product launch represents the culmination of nearly two years of hard work by Rackers throughout the organization, and it will serve as the core of our new Open Cloud platform,” said Lanham Napier, chief executive officer.

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Wednesday, August 8, 2012

Amazon Earnings Review: Margins Become Even Thinner


Amazon reported QE June 2012 financial results on July 26

I don't see anything uplifting whatsoever about this quarterly earnings report. Was it good for you? It wasn't for me. In fact, these results are depressing, even though CEO Jeff Bezos and CFO Tom Szkutak say the spending is for a long-term upside. A net income of $7 million on almost $13 billion of sales and an earnings per share of just a penny ($0.01) isn't working for any of us.

The only benefit of the doubt I can possible allow is calendar Q2 is a relatively slower quarter for Amazon. The Holiday Q4 is the annual financial performance peak. So we wait for later in the year and also for the this heralded long-term upside to materialize. These dismal financial charts speak for themselves.

Result, QoQ Change, YoY Change
Total Assets: $21.02 billion, +3%, +17%
Net Sales: $12.83 billion, -3%, +30%
Net Income: $7 million, -95%, -96%
Earnings per Share: $0.01, -96%, -98%

Outlook QE September 2012:
* Net sales are expected to be between $12.9 billion and $14.3 billion, or to grow between 19% and 31% compared with third quarter 2011.
* Operating income (loss) is expected to be between $(350) million and $(50) million, down from $79 million in the comparable prior year period.
* This guidance includes approximately $275 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions, investments, or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates.















“Amazon Prime is now the best bargain in the history of shopping – that is not hyperbole,” said Jeff Bezos, founder and CEO of Amazon.com. “We successfully launched Prime seven years ago with free unlimited two-day shipping on one million items. The price of annual membership was $79. Since then, Prime selection has grown to 15 million items. We've also added 18,000 movies and TV episodes available for unlimited streaming. And we’ve added the Kindle Owners’ Lending Library – borrow 170,000 books for free with no due dates – it even includes all seven Harry Potter books. What hasn’t changed since we launched Prime? The price. It’s still $79. We’re very grateful to our Prime members, and thank them whole-heartedly for the business and for the word-of-mouth that has made this program grow.”

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