When Apple Inc. (NASDAQ:AAPL) reported its fiscal third-quarter earnings, many investors likely held their breath. It seems like an eternity since the market reacted to quarterly earnings from the house that Jobs built with any sort of excitement.
In a development that probably surprised many, Apple Inc. (NASDAQ:AAPL) actually handed in less-than-horrible earnings. Apple shares got a boost after the report, which likely has many asking: is now finally the time to buy?
Tough times for technology stocks
All told, Apple Inc. (NASDAQ:AAPL)’s quarter was actually pretty good, and for that, shell-shocked investors can finally breathe a little easier. It’s been more than difficult enduring Apple’s non-stop slide from $700 per share to $400 per share over the past year.
Thankfully, despite the total sense of despair rained down from analysts and the financial media, Apple still in fact makes money.
Apple Inc. (NASDAQ:AAPL) actually managed to eke out a tiny increase in revenue–$35.3 billion in the third quarter versus $35 in the same quarter one year ago. It’s barely growth at all, but judging by the massive sell-off over the past year, you’d have thought this company was on the verge of going out of business.
Earnings were weak, which was no surprise. Diluted EPS clocked in at $7.47, well below last year’s $9.32 per share. Still, Apple’s quarterly profit beat estimates, which were for $7.29 per share.
It’s a slow, muddle-through period for many large-cap technology stocks, which most investors are probably aware of by now. Analysts have ratcheted down their earnings expectations for many large-cap tech stocks, including Apple Inc. (NASDAQ:AAPL) but also Microsoft Corporation (NASDAQ:MSFT) and Intel Corporation (NASDAQ:INTC).
Shares of Microsoft Corporation (NASDAQ:MSFT) rose 35% prior to releasing its quarterly earnings on July 18, making it one of the best Dow Jones Industrial Average performers since the start of the year.
At the same time, there’s no escaping the fact that Microsoft Corporation (NASDAQ:MSFT)’s recent quarterly results were ugly, and it’s not surprising that the stock has lost $5 per share in the few days since. Both quarterly and annual results missed expectations.
In all, the company racked up $73 billion in revenue and $2.62 in per-share earnings. EPS missed analyst expectations by $0.13, and revenue came up $5 billion short.
Much of the disappointment was due to the failure of the company’s Surface tablet. The software king took a $900 million charge in the quarter because of ‘Surface adjustments,’ presumably an effort to tell shareholders the company’s tablet simply isn’t selling.
Intel Corporation (NASDAQ:INTC) disappointed its own investors when it released its own quarterly earnings report. Revenue and diluted earnings per share fell 3% and 25%, respectively. Revenue is still struggling due to softening PC sales worldwide, and higher R&D expenses due to the company’s feverish push into mobile devices is dragging down profits. It remains to be seen whether or not Intel’s long-desired penetration into mobile will pan out.
Clearly, the market wants to see meaningful progress on the mobile front before it awards Intel Corporation (NASDAQ:INTC) a multiple on par with the S&P 500.