What’s Next For Microsoft Corporation (MSFT) and Google Inc (GOOG)?

Page 1 of 2

The latest release of quarterly earnings by Microsoft Corporation (NASDAQ:MSFT) and Google Inc (NASDAQ:GOOG) present a picture of slowing sales and decreasing ad revenue. The two companies appear to be struggling to find the right products and services to drive their revenue growth. Dealing with decreasing PC sales and a challenging mobile web environment led to results which missed analyst expectations. After the earnings release, Microsoft Corporation (NASDAQ:MSFT) and Google Inc (NASDAQ:GOOG) shares opened 3.5% and 9.3% lower the next trading day.

Microsoft Corporation (NASDAQ:MSFT)

Microsoft Corporation (NASDAQ:MSFT) dragged down by PC market

Fourth quarter results for Microsoft Corporation (NASDAQ:MSFT) showed the impact of continuing declines in the PC market. Net income for the period ended June 30 was $4.97 billion and diluted EPS was $0.59 per share versus a loss of $492 million, or ($0.06) per share. The results reflect a $900 million write-down related to the company’s price cutting on its Surface RT tablets, which affected EPS amounts by $0.07. According to USAToday, analysts polled by FactSet were expecting EPS of $0.75; revenue was expected to come in at around $20.7 billion and instead was $19.9 billion.

Despite the disappointing results, Microsoft Corporation (NASDAQ:MSFT) had strong demand in its enterprise and cloud offerings. For example, Server & Tools fourth quarter revenue grew 9%. The company also saw revenue grow in the following divisions: Windows (6%), Online Services (9%), and Entertainment and Devices (8%). Kevin Turner, COO at Microsoft Corporation (NASDAQ:MSFT), noted that the company has a leadership position in the cloud, with greater market adoption of the company’s cloud services, such as Office 365, Windows Azure, and Dynamics CRM.

In the months ahead, investors should watch for Windows 8.1 and how it addresses concerns related to Microsoft devices’ combination of touch + mouse + keyboard interface. The software update will be made available to third-party computer manufacturers in August.

Another interesting development is the arrival of Intel’s new Haswell microchips, which could also boost demand for Microsoft’s devices. Charles King, tech analyst at Pund-IT, told USA Today the chip was made to support Windows 8 features like touch enablement, longer battery life, and voice and gesture recognition.

Google Inc (NASDAQ:GOOG) challenged by mobile ads

As desktop ad revenue begins to slow for search engines, the next moneymaking opportunity lies in mobile devices. So far, increasing revenue from mobile ads has been a struggle for Google Inc (NASDAQ:GOOG), and it missed Wall Street estimates of $11.33 billion of net revenue and EPS, minus the cost of stock options, of $10.78 per share. The company reported second quarter net revenue of $11.1 billion, up from $9.2 billion a year ago. EPS rose to $9.54 per share from $8.42 per share.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!