Amazon, Apple, Disney, Google Have Best Corporate Reputations

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Amazon.com Lands in Prime Spot Atop Reputation Rankings in 14th Annual Harris Poll RQ Study

NEW YORK, Feb. 12, 2013 /PRNewswire/ -- While the overall perception of corporate America remains relatively grim, there were mixed signals to be found in the results of the 2013 Harris Poll RQ Study which engages over 14,000 members of the general public to measure the reputations of the sixty most visible companies in the country.

(Business Insider) Amazon has the best reputation of any company in the U.S., according to this year's Harris Interactive survey of 14,000 people. It just narrowly edged out Apple to take the top spot, making a big jump from its ranking last year.

Robert Fronk, EVP of Harris' Reputation Management service says in a release, "Our results show that Amazon has managed to build an intimate relationship with the public without being perceived as intrusive." (This sounds like a shot at other companies like Facebook.)

We'd also add that Amazon is a company that seems to be on your side. It makes cheap tablets, offers free shipping, and its Prime service a really great value. Apple, which is great for consumers, is still seen as a company with high prices trying to make loads of money. Amazon is seen as a better friend of the consumer on the value side.

Amazon.com Lands in Prime Spot Atop Reputation Rankings

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Microsoft Earnings Review: Windows Saves the Quarter!

Microsoft reported QE December 2012 financial results on January 24

Microsoft earnings peak with the calendar fourth quarter holidays and just missed matching the prior year. Earnings per share peaks for the past 4 years reveal Microsoft is treading water.
QE December 2012 $0.76
QE December 2011 $0.78
QE December 2010 $0.77
QE December 2009 $0.74

The ongoing existential question continues if Microsoft is ultimately relevant as the technology leading edge races mercilessly forward and therefore if the company life cycle has peaked. For now, CEO Ballmer has stayed in this brutal game with such worthy adversaries as Apple and Google but it is an uphill battle. It's hard out here for a Tech Giant!



Revenues and earnings per share growth rates have been a struggle for Microsoft. Future growth is possible, but robustness is doubtful.



The great news is total revenues reached an all-time high of $21.46 billion. Microsoft is still relevant, at least for now.



The sobering news is gross margin (73.47%) reached a 4-quarter low and second lowest in years. Competition and a changing technology landscape has lowered gross margins, which reached 80+% in the old Microsoft / Intel / Dell desktop days. Operating margin (36.22%) and net margin (29.72%) are respectable. The 18-quarter averages for gross, operating, and net margins are 77.87%, 37.86%, 27.72%, respectively.



Windows revenues saves the quarter in a big way! The annual holiday peak in Entertainment and Devices also assisted in boosting total revenues to a record high. However, the Entertainment and Devices revenues did not exceed the prior year peak.



Total assets are now a record $128+ billion. Apple, HP, and IBM are the other exclusive members of the Big Tech $100 Billion Assets Club, though Apple will surpass $200 billion total assets next quarter. Liquid assets (cash, cash equivalents, marketable securities) have increased to an amazing $68+ billion. Add noncurrent equity and other investments and total asset reserves reach nearly $79+ billion!

“Our big, bold ambition to reimagine Windows as well as launch Surface and Windows Phone 8 has sparked growing enthusiasm with our customers and unprecedented opportunity and creativity with our partners and developers,” said Steve Ballmer, chief executive officer at Microsoft. “With new Windows devices, including Surface Pro, and the new Office on the horizon, we’ll continue to drive excitement for the Windows ecosystem and deliver our software through devices and services people love and businesses need.”

"We saw strong growth in our enterprise business driven by multi-year commitments to the Microsoft platform, which positions us well for long-term growth,” said Peter Klein, chief financial officer at Microsoft. “Multi-year licensing revenue grew double-digits across Windows, Server & Tools, and the Microsoft Business Division.”

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Microsoft Earnings Review: Decline of an Empire

Microsoft reported QE September 2012 financial results on October 18

Straight up, CEO Steve Ballmer is the conservator of the Gates Family fortune and legacy while Bill runs around with Warren Buffett and Melinda gives vaccines to kids in Africa. You think the late Steve Jobs dreamed of Ballmer replacing him at Apple? You think the Big Tech companies such as Google, IBM, Qualcomm, et al. wish they could lure him away to lead them onwards and upwards forevermore?

Of course not, Ballmer's job is to sit on an unbelievable pile of cash and try not to screw up too much, of which he is capable of (see prior quarter EPS Suffers From $6.2 Billion Bungled Vision!).

That pile of cash now consists of liquid assets (cash, cash equivalents, marketable securities) that have increased to $66+ billion. Add noncurrent equity and other investments and the reserves are $76+ billion!

The problem is Steve Ballmer has no idea what to do with all this accumulated glory as he is hopelessly trapped inside the box as the world leaves the Mighty Microsoft behind. He is the old vaudevillian whose venues and crowds become smaller and smaller until ultimately only obscure county fairs and then finally ladies social clubs are his only gigs.

How has Microsoft been doing? Let's appreciate the downtrend and ineffectiveness of Microsoft management to lead stay at the leading edge of technology.



What's going on here? Could margins be slipping as the same old tricks lose effectiveness?



Year over year growth is slipping away... However, this next quarter, Holiday Q4, should be strong, even for Microsoft, and we might see a year over year increase at top line and bottom line. If not, the castle gates have been breached. Q1 and Q2 2013 could be ugly and confirm the hastening decline of the empire.



Windows new era magic isn't working yet, maybe in Q4.



We now arrive at the crowd of irate MSFT stockholders yelling about Ballmer's lack of stewardship and maximizing shareholder wealth.



Our old vaudevillian speaks and brings out the hat and cane:

"The launch of Windows 8 is the beginning of a new era at Microsoft,” said Steve Ballmer, chief executive officer at Microsoft. “Investments we’ve made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers, and partners.”

$MSFT $XLK

Largest USA Tech Companies Earnings Soften: Apple Dominates, HP Plunges

This is the technology sector reported financial performance going into the October earnings season.

Quarterly Net Income

The Largest USA Tech Companies have reported quarterly aggregate net income of $14.8 billion, which is lower than the prior quarter $35.6 billion. This is a sequential QoQ decrease of -$20.8 billion and -58%! What happened? HP reported an epic quarterly net loss of -$8.9 billion, which offset the Apple quarterly net income of +$8.8 billion. Microsoft reported a rare quarterly net loss of -$492 million. Eight of the eleven companies reviewed reported a QoQ decrease in net income.

A net decrease is not unusual or unexpected as summer is typically a slower financial performance on an annual cyclical basis for the tech sector. But the huge HP and extraordinary Microsoft net losses created a plunge. The only three sequential QoQ increases were IBM (+$816 million) and Intel (+$89 million) and EMC (+$63 million).

For the latest quarters reported, Apple continues dominating with an incredible $8.82 billion quarterly net income. Second was IBM at $3.88 billion, third was Intel at $2.83 billion, and fourth was Google with $2.79 billion. Apple earned more than #2 IBM and #3 Intel combined.

The rest of the pack follows with #5 Oracle at $2.03 billion, #6 Cisco at $1.92 billion, #7 Qualcomm at $1.02 billion rounding out the Billion Dollar Club. Trailing are #8 EMC at $689 million and #9 Amazon at a mere $7 million. Further behind are #10 Microsoft at a dismal net loss of -$492 million and #11 HP with the aforementioned epic loss of -$8.86 billion. Apple comprises approximately 60% 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 +12.29%, a multi-quarter low and -1.68% decrease from the prior quarter. Seven of the eleven companies reviewed reported decreases. The largest sequential QoQ decreases were HP (-8.564%), Microsoft (-6.42%), and Apple (-2.08%). The only significant sequential QoQ increase was Cisco (+0.65).

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%), and Microsoft (+14.95%). Next are #6 IBM (+14.30%), and #7 Oracle (+13.53%).

Significantly lagging the field are #8 Cisco at +9.01% and #9 EMC at +8.42%. Amazon is #10 and a much lower +1.82%. Finally, HP is last and #11 at a negative -4.44%.



I have included Amazon because of the Kindle Fire, streaming, cloud services, and the resulting competition with others listed.

Status Updated through Oracle quarterly financial results reported 9-20-12
Next reports: October earnings season

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Big Tech Assets Rise, Apple Reaches Record $163 Billion

This is the technology sector reported financial position going into the October earnings season.

Total Assets

The Largest USA Tech Companies have reported all-time high aggregate total assets of $940 billion. This is a net increase of +$14 billion and +1.6% from the prior quarter. Apple led the way, and continues pulling away, with another incredible +$11.9 billion quarterly increase, followed by Google (+$8.9 billion), and Microsoft (+$3.3 billion). A huge decrease was reported by HP (-$10.1 billion), followed by Oracle (-$1.8 billion), and IBM (-$1.5 billion).

The $100 Billion Club: For the latest quarter reported, Apple continues #1 and largest at $162.9 billion. Microsoft moved up to #2 at $121.3 billion while HP slipped to third at $117.6 billion. IBM continues at #4 with $113.8 billion. Cisco is #5 at $91.8 billion.

The next group is #6 Google at $86.1 billion, #7 Oracle ($76.6 billion), and #8 Intel ($72.4 billion). Qualcomm and EMC are a more distance #9 and #10 at $42.4 billion and $35.0 billion, respectively. Amazon is last and #11 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 54.53%, a slight decrease of -0.85% from the prior quarter. Six of the eleven companies reviewed reported increases, led by Intel (+2.3%) and followed by EMC (+0.85%) and Oracle (+0.84%). Google and Microsoft reported the largest decreases at -4.79% and -3.46%, respectively.

For the latest quarters reported, Qualcomm (77%) continues leading Google (75%) to have the strongest capital position. Apple is #3 at 69%, followed closely by Intel at 67%. Next are EMC, Cisco, Oracle, and Microsoft at 63%, 57%, 56%, and 55%, respectively. Amazon is 9th at 36%, followed by HP (27%) and finally IBM (18%) is last and #11.



Status
Updated through Oracle quarterly financial results reported 9-20-12
Next reports: October earnings season

Earnings Reviews

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Big Tech Profits Soften: HP, Microsoft, Amazon Plunge!

Net Income: Quarter over Quarter Change

The Largest USA Tech Companies reported softening profits from the prior quarter, which is not unusual this time of year on an annual cyclical basis. Only 3 of the 10 companies reviewed reported sequential quarterly increases (Oracle, IBM, Intel).

First, HP is not included in the chart below. HP, which is among the walking wounded, reported a disastrous quarter and a chart-busting -656% decrease in net income QoQ. HP reported a net loss of -$8.86 billion for their latest quarter, compared to net income of +$1.59 billion in the prior quarter. Including HP skews the chart and obscures the data.

Reporting net income increases quarter over quarter were Oracle (+38%), IBM (+27%), and Intel (+3%). Reporting a decrease in net income from the prior quarter were Google (-4%), Cisco (-11%), Apple (-24%), and Qualcomm (-46%). The Big Losers were Amazon (-95%), Microsoft (-110%), and the aforementioned HP (-656%). The second calendar quarter is typically slower and a quarterly drop for many tech companies in total revenues, net income, and earnings per share.



Net Income: Year over Year Change

The Largest USA Tech Companies reported more positive results from the prior year, compared to the prior quarter. 6 of the 10 companies reviewed reported YoY increases. Cisco (+56%) and Apple (+21%) led the way, followed by Qualcomm (+17%), Google (+11%),  Oracle (+8%), and IBM (+6%). The remainder lost ground and some lost huge territory. Intel (-4%), Amazon (-96%), Microsoft (-108%), and HP (-560%) reported decreases year over year.

HP is not included in the chart below. Including HP skews the chart and obscures the data.



Updated through HP quarterly financial results reported 8-22-12
Next reporting: Oracle in September

Big Tech Assets Rise, Apple Reaches Record $163 Billion

Largest USA Tech Companies Earnings Plunge, But Apple Still Dominates

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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 Cisco, Oracle, 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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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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Microsoft Earnings Review: EPS Suffers From $6.2 Billion Bungled Vision!

Microsoft reported QE June 2012 financial results on Thursday, July 19

Though known in advance, you really have to see the financial statements and the charts below to appreciate the extent of what Microsoft management is capable (incapable?) of. Microsoft took the $6.19 billion non-cash accounting charge, announced 7-2-12, related to the 2007 acquisition aQuantive, Inc. Yep, they wrote off as an impairment the goodwill on that failed venture. And what a failure it was! So we begin the current quarterly financial performance in a very deep hole for this monumental loss and bungled vision.

Ignoring any hard-won bottom line gains against Apple, Google, Amazon, et. al now wiped out by a single acquisition catastrophe, year over year total revenues have been flat to decreasing recently. Earnings per share year over year was downtrending anyway. As I have noted before, the ongoing existential questions are now if Microsoft is ultimately relevant as the technology leading edge races forward and if the company life cycle has peaked.

Total assets are now a record $121+ billion. Apple, HP, and IBM are the other exclusive members of the Big Tech $100 Billion Assets Club. Liquid assets (cash, cash equivalents, marketable securities) have increased to an amazing $63+ billion. Add noncurrent equity and other investments and total asset reserves reach nearly $73 billion!

Metric, QoQ Change, YoY Change
Total Assets: $121.27 billion, +3%, +12%
Total Revenues: $18.06 billion, +4%, +4%
Net Loss: ($492 million), -110%, -108%
Loss per Share: ($0.06), -110%, -109%













“We delivered record fourth quarter and annual revenue, and we’re fast approaching the most exciting launch season in Microsoft history,” said Steve Ballmer, chief executive officer of Microsoft. “Over the coming year, we’ll release the next versions of Windows, Office, Windows Server, Windows Phone, and many other products and services that will drive our business forward and provide unprecedented opportunity to our customers and partners.” “The combination of solid revenue growth and rigorous cost discipline drove double-digit operating income growth for the quarter, adjusting for the goodwill impairment and deferred revenue,” said Peter Klein, chief financial officer of Microsoft. “We are focusing our resources in strategic areas that will deliver shareholder value and long-term growth opportunities.”

$MSFT $XLK

Microsoft Announces $6.2 Billion Non-Cash Accounting Charge

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Microsoft CEO Steve Ballmer

Microsoft Announces Non-Cash Accounting Charge

REDMOND, Wash. — July 2, 2012 —

Microsoft Corp. today announced that it will take a non-cash, non-tax-deductible income statement charge for the fourth quarter of fiscal year 2012 for the impairment of goodwill in its Online Services Division segment, mostly related to its 2007 aQuantive, Inc., acquisition.

Under accounting guidelines, companies are required to conduct an annual goodwill impairment test for each business unit. Goodwill arises in an acquisition when the fair value paid for a business exceeds the value of the identifiable net assets. The goodwill in the Online Services Division was substantially the result of the 2007 acquisition of aQuantive. As a result of its 2012 impairment review, Microsoft has determined that a write down of its Online Services Division goodwill of approximately $6.2 billion is required.

Bing search share in the U.S. has been increasing, revenue per search (RPS) has been growing, MSN is the No. 1 portal in 29 markets worldwide and the company’s partnership with Yahoo! has continued to expand geographically. While the Online Services Division business has been improving, the company’s expectations for future growth and profitability are lower than previous estimates.

Microsoft completed its acquisition of aQuantive on Aug. 13, 2007, in an all-cash transaction valued at just over $6.3 billion. While the aQuantive acquisition continues to provide tools for Microsoft’s online advertising efforts, the acquisition did not accelerate growth to the degree anticipated, contributing to the write down.

Microsoft does not expect this accounting write down to affect its ongoing business or financial performance.

Microsoft's $6.2B Writedown After AQuantive Fails Microsoft is taking a $6.2 billion writedown for almost the entire amount it paid for Internet-advertising company AQuantive.

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Microsoft Surface Tablet: First Look and Hands On

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Microsoft CEO Steve Ballmer with Surface Tablet

Microsoft Surface Tablet: First Look ABC Tech Editor Joanna Stern has a first-look at the Microsoft Surface Tablet.

Microsoft Surface Tablet: Hands-On A look at Microsoft's new Surface Tablet running Windows 8.

Window Microsoft Surface In-Hand Hands-On A look at Microsoft's new Surface Tablet running Windows 8.

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Big Tech Assets Rise, Apple Surges to $151 Billion

The Largest USA Tech Companies have reported aggregate total assets of $888 billion, which is the highest in the 5 quarters reviewed and an all-time high. This is a net increase of +$25 billion and +3% from the prior quarter. Apple led the way with a strong +$12 billion increase, followed by Microsoft (+$6 billion), Google (+$5 billion), and Qualcomm (+$4 billion). The only decreases were reported by Amazon (-$5 billion) and IBM (-$1 billion).

The $100 Billion Club: For the latest quarter reported, Apple continues #1 and largest at $150.9 billion. HP continues in second at $127.7 billion, followed by #3 Microsoft at $118.0 billion. IBM dropped to #4 at $115.3 billion. Next is #5 Cisco at $91.2 billion. The next group are #6 Google at $77.1 billion, which surpassed now #7 Oracle ($74.4 billion). Intel continues at #8 ($71.8 billion) followed by #9 Qualcomm ($41.5 billion). Amazon is last and #10 at $20.3 billion. I have included Amazon because of the Kindle Fire, streaming, cloud services, and the resulting competition with others listed.



The Largest USA Tech Companies have reported an average capital to assets ratio of 54.89%, a +1.39% increase from the prior quarter. The net increase was led by Amazon (+5%) and Apple (+3%). Only Google reported a decrease and this was negligible (-0.12%). For the latest quarters reported, Google continues leading with the strongest capital of 80%, followed by Qualcomm at 77%. Apple is #3 at 68%, followed closely by Intel at 65%. Next are Oracle, Microsoft, and Cisco at 58%, 58%, and 56%, respectively. Amazon is 8th at 36%, followed by HP (33%) and finally IBM (18%).




Status Updated through HP quarterly financial results reported 5-23-12

Largest USA Tech Companies Earnings Slip, Apple Dominates

Big Tech Market Cap: Apple Larger Than Microsoft and IBM Combined!

Big Tech Profits Increase: Qualcomm, Apple, Google Lead Surge

Largest USA Tech Companies Earnings Slip, Apple Dominates

The Largest USA Tech Companies have reported quarterly aggregate net income of $33.9 billion, which is lower than the prior quarter $37.4 billion. This is a sequential QoQ decrease of -$3.5 billion and -9.4%. The net decrease is not unusual or unexpected as the first quarter of the calendar year is typically lower than the  prior fourth quarter (Holiday) results on an annual cyclical basis. The largest sequential QoQ increases were HP (+$1.2B) and Qualcomm (+$829 million). The largest sequential QoQ decreases were by IBM (-$2.43 billion), Microsoft (-$1.52 billion), Apple (-$1.44 billion), and Intel (-$622 million).

For the latest quarters reported, Apple leads with an incredible $11.62 billion. Second is Microsoft at $5.11 billion, less than half of Apple. These top two are followed by #3 IBM at $3.07 billion. The rest of the pack follows with #4 Google at $2.89 billion, #5 Intel at $2.74 billion, #6 Oracle at $2.50 billion, #7 Qualcomm at $2.23 billion, and #8 Cisco at $2.17 billion. Trailing are #9 HP at $1.47 billion and #10 Amazon at a mere $130 million. I have included because of the Kindle Fire, streaming, cloud services, and the resulting competition with others listed. Apple comprises 34% of the total quarterly net income of the 10 tech companies listed!



The Largest USA Tech Companies have reported an average return on assets of +14.61%, a +0.19% increase from the prior quarter of 14.42%. Amazon and HP dragged the average down. The largest sequential QoQ increases were Qualcomm (+2.62%), Apple (+1.44%) and Google (+0.75%). The largest sequential QoQ decreases were Microsoft (-1.18%), Intel (-1.09%), and HP (-0.93%).

For the latest quarters reported, Best of Breed goes to Apple with a commanding and incredible lead of at +31.78% ROA, followed by Microsoft at 21.37% and Intel at 18.14%. Next are #4 Google 15.76%, #5 Qualcomm 15.51%, #6 IBM 14.13%, and #7 Oracle 13.44%. Significantly lagging the field are #8 Cisco 8.36% and #9 HP at a dismal 4.74%. Retail-oriented Amazon is last and #10 at +2.82%.



Updated through Cisco quarterly financial results reported 5-9-12
Next reports: HP (May 23), Oracle (June)

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Microsoft Earnings Slow More Than Expected

Microsoft ($MSFT) reported calendar Q1 2012 financial results on Thursday, April 19


Q1 performance was the expected letdown after the prior Q4's record high total revenues and earnings per share. The annual March slowdown was more pronounced than I expected when looking at YoY results. Both net income and earnings per share dipped slightly YoY, which suggests a base is not being built during the transition to battle Apple, Google, et al. in the leading edge technology race. This is the first time both have decreased YoY since the QE September 2009.

The good news is a negative trend was reversed. Gross margin increased, after setting a multi-year low in the prior quarter. However, the operating margin decreased, mostly the result in the dip in revenues and a general increase in operating expenses. Net margin dropped to a 7-quarter low. This isn't the high growth, high margin Microsoft grandpa used to talk about.

All segment revenues dropped, with lower-margin Entertainment & Devices plunging. This ruined the quarter and occurs every Q1 after the Q4 annual Holiday peak. Higher-margin Windows & Windows Live segment revenues slightly decreased, as did Business and Servers & Tools. This was the reason for the increase in gross profit margin.

CEO Steve Ballmer kept his game face on while touting the future, "We’re driving toward exciting launches across the entire company, while delivering strong financial results. With the upcoming release of new Windows 8 PCs and tablets, the next version of Office, and a wide array of products and services for the enterprise and consumers, we will be delivering exceptional value to all our customers in the year ahead." You go guy!

Mighty Microsoft needs to step up more in 2012. Management has marshaled their mega resources so the Empire can strike back. Total assets are now a record $118.01 billion. Apple, HP, and IBM are the other exclusive members of the Big Tech $100 Billion Club. However, the revolution is in progress. The mobile and open-source rebels have made tremendous gains and are at the gates.

Microsoft Income Statement Calendar Q1 2012 Microsoft reported total revenues of $17.41 billion, net income of $5.11 billion, and earnings per share of $0.60. From the prior calendar quarter Q4 2011, these were -17%, -23%, and -23%. From the prior calendar year Q1 2011, these were up +6%, -2%, and -2%, respectively. Gross margin increased QoQ and YoY to 77.30%. Operating margin dipped QoQ but increased YoY to 36.62%. Net margin dropped QoQ and YoY to 29.34%. Cash flow from operations per share increased cyclically to a record $1.13.

Microsoft Balance Sheet Calendar Q1 2012 Total assets increased to a record $118.01 billion. The capital ratio increased to a multi-year high of 58.18%. The current ratio is a very liquid 65.13%. Microsoft is very liquid with strong capital and has $59.53 billion in cash reserves (cash, cash equivalents, and marketable securities). Add noncurrent investments and the reserves are $68.60 billion. Return on assets are a 10-quarter low of 21.37%, which is still excellent. The debt ratio is stable and reasonable at 10.12% of total assets.











Microsoft Business Outlook Microsoft is revising operating expense guidance downward and now offers a range of $28.3 billion to $28.7 billion for the full year ending June 30, 2012. Microsoft also offers preliminary fiscal year 2013 operating expense guidance of $30.3 billion to $30.9 billion, representing 6% to 8% growth from the mid-point of fiscal year 2012 guidance.