Free Newsletters - Space News - Defense Alert - Environment Report - Energy Monitor
. 24/7 Space News .




INTERNET SPACE
Apple bruised as analysts predict slower growth
by Staff Writers
Washington (AFP) Jan 24, 2013


Microsoft shares drop as profits dip slightly
San Francisco (AFP) Jan 24, 2013 - Microsoft shares slipped Thursday after the release of quarterly earnings figures that surpassed forecasts but left it unclear how the software titan will score in the post personal computer era.

Microsoft reported that its profit dipped slightly in the final three months of last year despite revenues boosted by the release of new-generation Windows software tailored for the world of smartphones and tablet computers.

Profit was down 3.7 percent from the same quarter a year earlier to $6.38 billion, better than most forecasts, while revenues rose 2.7 percent to $21.46 billion, a record for the US tech giant.

Microsoft said the boost in revenues came from pre-sales and upgrades of Windows 8, recognized in the quarter, and gains in business software and other segments.

Shares in the Redmond, Washington-based technology firm were down more than one percent to $27.25 in after-market trading that followed release of the earnings figures for its second fiscal quarter.

Microsoft did not provide specific sales data for the Surface tablet launched late last year or its new Windows Phone 8 system, two keys to the company's future.

Chief executive Steve Ballmer said the company's "big, bold ambition to reimagine Windows as well as launch Surface and Windows Phone 8," had sparked "unprecedented opportunity and creativity with our partners and developers."

The profit amounted to 76 cents per share -- one cent better than the Wall Street consensus.

Citi analyst Walter Pritchard said Microsoft was on target.

"This was the first time in memory we haven't seen disappointment in the Windows line," he said in a research note, maintaining a buy rating.

Raimo Lenschow at Barclays said the results were "essentially in line with investors' low expectations."

John Ogg at 24/7 Wall Street called it a "mixed" report and said there appeared to be concerns that Microsoft did not offer guidance beyond saying its operating expenses would be $30.3 to $30.9 billion for the fiscal year.

The Windows division saw revenues jump 24 percent to $5.88 billion, while revenue was up 11 percent to $869 million at Microsoft's online services division. To date, more than 60 million Windows 8 licenses have been sold.

The growth in Windows sales was driven by operating system upgrades, sales of Surface tablets, and businesses licensing Windows 8, Microsoft chief financial officer Peter Klein said in a conference call with analysts.

"We learned a lot this quarter; we saw some really great demand for some of the touch devices we brought to market," Klein said.

Microsoft is working with device and chip makers to field a variety of Windows 8 touch-screen devices "at the right price points," he noted.

Microsoft is also beginning to see a pay-off from years spent working to "finely tune" its search engine that powers queries at Yahoo! websites.

Gains in online services, server and enterprise software helped offset a decline in the entertainment division which produces the Xbox console and games.

Microsoft is expected to introduce a successor to the Xbox 360 this year, with the videogame console evolving into a hub for digital home entertainment.

Windows remains the dominant platform for personal computers, but Microsoft has lost ground to Google and Apple in newer devices which use rival operating systems.

The company's search and online services have struggled, but its Xbox is the hottest gaming system in the industry.

Apple took a fresh bruising on Thursday after a gloomy forecast accompanying its record quarterly profits prompted pessimism over the tech giant's slowing growth trajectory.

Apple shares tumbled 12.35 percent to close at $450.50, extending their decline from record highs above $700 last year.

"We don't think the Apple growth story is over, but shares will likely languish until confidence is restored," said Sterne Agee analyst Shaw Wu.

Apple on Wednesday announced a profit of $13.1 billion on revenue of $54.5 billion in the fiscal quarter that ended on December 29, with sales of iPhones and iPads setting quarterly highs.

The California-based company said it had sold 47.8 million iPhones and 22.9 million iPad tablet computers in the closing months of 2012.

But despite those figures, investors soured on Apple after it forecast that revenue for the current quarter would range from $41-43 billion and that it would have a gross margin of 37.5 to 39.5 percent.

Apple has been long known for a high margin, the difference between what it charges for products and the cost of making them.

"Apple's profit did go up; it just didn't go up that much," said analyst Rob Enderle of Enderle Group in Silicon Valley.

"They had a really high increase in sales, but their high margin is coming apart at the edges... They are making less per gadget."

BTIG Research's Walter Piecyk said Apple's outlook implies a contraction in earnings per share of as much as 25 percent.

Apple's results "were not terrible, although they were below our estimates," Piecyk said.

"We believe Apple could have sold more than 50 million phones had operators in the United States not tightened their upgrade policies."

But he noted that a bigger worry for Apple is sales outside the United States, "likely a reflection of Apple's phones being too expensive for what is predominantly a non-subsidized, pre-paid market globally."

The analyst said Apple, which has been a pioneer in smartphones and tablets, now needs to consider competition from lower-cost rivals.

"Apple needs a cheaper phone. Period," he said in a note to clients.

Others remained upbeat about Apple's prospects, saying the company is still innovating and remains the standard for the high end of the market.

"We are buyers of Apple on the pullback," said Gene Muster at Piper Jaffray, arguing that "investors will return to the stock once the potential of new products comes into focus over the next three to six months."

But Munster nonetheless scaled back his expectations for Apple shares, saying that profit margins will be squeezed as consumers shift to lower-cost devices.

This situation "highlights the importance of Apple launching a lower priced iPhone," Munster said in a note to clients, adding that he expects Apple to release a television in 2013, which should add around five percent to revenues and "give a product for investors to anticipate."

Michael Walkley, an analyst at Canaccord Genuity, maintained his buy rating but lowered his price target for Apple.

"We believe the soft March quarter guidance was due to Apple ramping supply of the iPhone 5 during the December quarter," he said.

"We maintain our belief Apple has a strong product pipeline that should result in reaccelerating year-over-year earnings growth during the June quarter."

Apple chief executive Tim Cook offered no reason for pessimism during the company's earnings call.

"The most important thing is that our customers love our products," Cook said. "Not just buy them; love them."

Apple's stock has been in a downward spiral since hitting a record above $700 last year, amid concerns that it is losing its edge in innovation and that rivals are catching up or surpassing Apple in key segments.

The iPhone 5 recently made a lackluster debut in China and an analyst reported that Apple had cut orders for smartphone parts.

Apple remains the world's most valuable company by market capitalization but its image has suffered recently, perhaps most notably with the embarrassing release of its glitch-ridden maps program for the new iPhone.

An IDC research firm survey last month showed Google's Android operating system will power more than two-thirds of smartphones sold worldwide in 2012 and will remain the dominant platform for at least the next four years.

.


Related Links
Satellite-based Internet technologies






Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks
del.icio.usdel.icio.us DiggDigg RedditReddit GoogleGoogle




Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News





INTERNET SPACE
Rumors of multiple iPhones from Apple
San Francisco (UPI) Jan 21, 2013
New rumors suggest Apple will bring out three new iPhone models this year, including one dubbed the "iPhone Math," tech sites say. Brightwire.com, translating stories from the China Times and Taiwan-based Commercial Times, said the iPhone Math would feature a 4.8-inch screen and an 8-megapixel camera. Brightwire could offer no explanation for the odd moniker, especially since all ... read more


INTERNET SPACE
US, Europe team up for moon fly-by

Russia to Launch Lunar Mission in 2015

US, Europe team up for moon fly-by

Mission would drag asteroid to the moon

INTERNET SPACE
Possible Clues to Ancient Subsurface Biosphere on Mars

NASA's Veteran Mars Rover Ready to Start 10th Year

Opportunity Investigating Light-toned Veins in Rock Outcrop

Reull Vallis: a river ran through it

INTERNET SPACE
TDRS-K Offers Upgrade to Vital Communications Net

An Astronaut's Guide

Mathematical breakthrough sets out rules for more effective teleportation

Orion Teamwork Pays Off

INTERNET SPACE
Reshuffle for Tiangong

China to launch 20 spacecrafts in 2013

Mr Xi in Space

China plans manned space launch in 2013: state media

INTERNET SPACE
NASA to Send Inflatable Pod to International Space Station

ISS to get inflatable module

ESA workhorse to power NASA's Orion spacecraft

Competition Hopes To Fine Tune ISS Solar Array Shadowing

INTERNET SPACE
NASA Selects Experimental Commercial Suborbital Flight Payloads

Payload elements come together in Starsem's wrap-up Soyuz mission from Baikonur Cosmodrome for Globalstar

Amazonas 3 in Kourou for Ariane 5 year-opening launch campaign

Suborbital Space Research and Education Conference Scheduled for June 2013

INTERNET SPACE
New Evidence Indicates Auroras Occur Outside Our Solar System

Glitch has space telescope shut down

Earth-size planets common in galaxy

NASA's Hubble Reveals Rogue Planetary Orbit For Fomalhaut B

INTERNET SPACE
Novel sensor provides bigger picture

Dutch architect to build house with 3D printer

Researchers move Barkhausen Effect forward

Computer breakthrough: Code of life becomes databank




The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement