It was a case of a tale of two techs last night after Amazon and Google both reported Q4 2013 earnings, with the former dropping heavily and the latter initially subdued and then rising sharply during the analyst Q&A.
Amazon shares stumbled last night after Wall Street’s close to fall 4.5%, and as much as 10% as the company’s results for the period ending December 31st 2013 underwhelmed investors. With the company on a price/earnings of 524 for the current fiscal year, expectations are sky high. These expectations were set even higher when the company recently flagged a record breaking Christmas period.
The company earned $239 million, or 51 cents a share, on revenue of $25.59 billion for the quarter, compared with earnings of $97 million, or 21 cents a share, on $21.27 million in sales in the same period in 2012. Estimates were for $26.05 billion in revenue and 74 cents in earnings.
Amazon gave a first quarter 2014 guidance of between $18.2 billion and $19.9 billion, while analysts were looking for revenue of $19.67 billion for the quarter.
The company warned that it may have to raise postage prices in the U.S. as its shipping costs had risen and a sign that sales growth in international markets was slowing worried analysts on this hyper pumped up stock. Still with sales rising from $19 billion in 2008 to around $65 billion in 2013 the company’s sales growth has been extraordinary. I am certainly a big fan of the company, but not necessarily the shares, given its amazing customer service and breadth of products.
Google in contrast had a better after house session rising over 4% with adjusted fourth-quarter earnings of $12.01 a share on adjusted revenue of $13.55 billion. Analysts estimated $12.22 a share of earnings on revenue of $13.55 billion.
Total advertising revenues rose 17% to $14.1 billion from the year earlier period with clicks on Google Adwords increasing 31% and CPC (cost per click) fell 11%.
Earlier in the week the company announced the sale of the Motorola Mobility unit to Lenovo for $2.9 billion after buying it for $12 billion in 2012 for its patent portfolio aiming to protect its Android platform. The sale sounds like a smart move with revenue dropping 24% to $1.15 billion and losses increasing from $248 million to $384 million from the prior period. Motorola has around a 1% share of the global handset market.
Google announced the purchase of DeepMind Technologies earlier in the week for £400 million ($660 million) which followed the purchase of Nest Labs earlier in January for $3.2 billion.
Deepmind is a start-up specialising in machine learning algorithms that one of its founders says could lead to a truly “conscious” form of artificial intelligence in 20 years. The company was founded by Mustafa Suleyman and Shane Legg.
Google looks in good shape right now with plenty of dollars chasing digital advertising right now.
Contrarian Investor UK
IMPORTANT: The posts I make are in no way meant as investment suggestions or recommendations to any visitors to the site. They are simply my views, personal reflections and analysis on the markets. Anyone who wishes to spread bet or buy stocks should rely on their own due diligence and common sense before placing any spread trade.
by contrarianuk
A tale of two tech giants – Amazon and Google earnings
Jan 31, 2014 at 6:15 am in Market Commentary by contrarianuk
It was a case of a tale of two techs last night after Amazon and Google both reported Q4 2013 earnings, with the former dropping heavily and the latter initially subdued and then rising sharply during the analyst Q&A.
Amazon shares stumbled last night after Wall Street’s close to fall 4.5%, and as much as 10% as the company’s results for the period ending December 31st 2013 underwhelmed investors. With the company on a price/earnings of 524 for the current fiscal year, expectations are sky high. These expectations were set even higher when the company recently flagged a record breaking Christmas period.
The company earned $239 million, or 51 cents a share, on revenue of $25.59 billion for the quarter, compared with earnings of $97 million, or 21 cents a share, on $21.27 million in sales in the same period in 2012. Estimates were for $26.05 billion in revenue and 74 cents in earnings.
Amazon gave a first quarter 2014 guidance of between $18.2 billion and $19.9 billion, while analysts were looking for revenue of $19.67 billion for the quarter.
The company warned that it may have to raise postage prices in the U.S. as its shipping costs had risen and a sign that sales growth in international markets was slowing worried analysts on this hyper pumped up stock. Still with sales rising from $19 billion in 2008 to around $65 billion in 2013 the company’s sales growth has been extraordinary. I am certainly a big fan of the company, but not necessarily the shares, given its amazing customer service and breadth of products.
Total advertising revenues rose 17% to $14.1 billion from the year earlier period with clicks on Google Adwords increasing 31% and CPC (cost per click) fell 11%.
Earlier in the week the company announced the sale of the Motorola Mobility unit to Lenovo for $2.9 billion after buying it for $12 billion in 2012 for its patent portfolio aiming to protect its Android platform. The sale sounds like a smart move with revenue dropping 24% to $1.15 billion and losses increasing from $248 million to $384 million from the prior period. Motorola has around a 1% share of the global handset market.
Google announced the purchase of DeepMind Technologies earlier in the week for £400 million ($660 million) which followed the purchase of Nest Labs earlier in January for $3.2 billion.
Deepmind is a start-up specialising in machine learning algorithms that one of its founders says could lead to a truly “conscious” form of artificial intelligence in 20 years. The company was founded by Mustafa Suleyman and Shane Legg.
Google looks in good shape right now with plenty of dollars chasing digital advertising right now.
Contrarian Investor UK
IMPORTANT: The posts I make are in no way meant as investment suggestions or recommendations to any visitors to the site. They are simply my views, personal reflections and analysis on the markets. Anyone who wishes to spread bet or buy stocks should rely on their own due diligence and common sense before placing any spread trade.