A few notable companies that reported earnings are listed in the table below. The results are especially relevant for investors exposed to the semiconductor, co-operate server, and the PC market:
| Company | Recent Price ($) | Average Volume |
|---|---|---|
| SanDisk Corporation (NASDAQ:SNDK) | 53.42 | 4,130,730 |
| IBM | 191.61 | 4,069,750 |
| Microsoft Corporation (NASDAQ:MSFT) | 30.6 | 49,855,600 |
| NXP Semiconductors NV (NASDAQ:NXPI) | 26.74 | 3,121,600 |
(Data Source: Yahoo! Finance)
Mixed view on x86 market
International Business Machines Corp. (NYSE:IBM) led markets lower when the company reported earnings of $3 per share, missing estimates by $0.05 per share. Revenue also missed consensus estimates by $1.28 billion, as the company generated sales of $23.41 billion. Quarterly results for International Business Machines Corp. (NYSE:IBM) were hurt by weakness in hardware.
Sales declined 17%, while power systems sales dropped 32% from the previous year. Chips and storage were also weak, declining 16% and 11%, respectively. IBM blamed deals closing late as a reason for the miss, and held its 2013 forecast.
Media is speculating that International Business Machines Corp. (NYSE:IBM) will sell its CRN x86 server unit.
Unlike IBM, Microsoft Corporation (NASDAQ:MSFT) shares rose after the company demonstrated strong server software sales. The results allayed fears that declining PC sales would hurt the company. Microsoft Corporation (NASDAQ:MSFT) is planning to release Windows 8.1, which will bring the Start button back, and will also allow users the option to boot directly into a “desktop” mode.
Microsoft Corporation (NASDAQ:MSFT) reported a 23% rise in Windows 8 sales, a 5% increase for Office 2013 pre-sales, an 11% increase for Server and Tools, and an 18% increase in sales from online services. Microsoft is also lowering its forecast for operating expenses, from $30.3 billion – $30.9 billion to $30.2 – $30.5 billion.
Semiconductors shine
NXP Semiconductors NV (NASDAQ:NXPI) beat estimates and also gave a rosy forecast for the current quarter. NXP expects its revenue to match consensus at $1.12 billion – $1.18 billion. Earnings will be $0.62 – $0.70 per share.
A weak spot for NXP was the PC and mobile chip unit. Sales dropped 12% from the previous quarter. Overall, margins grew to 50%, up from 46% last quarter.
Storage supplier SanDisk Corporation (NASDAQ:SNDK) earned $0.84 per share, beating estimates by a full nickel. Revenue was $1.34 billion. SanDisk benefited from strong NAND flash prices, as sales of solid-state drives (“SSD”) rose 20%.
SanDisk also increased its R&D spending by 21%. The company is developing embedded mobile offerings, while continuing to develop better SSD products.
Conclusion
A weak quarter from International Business Machines Corp. (NYSE:IBM) should give investors some pause. Weaker demand could persist in 2013, which limits upside. IBM gave up its gains for the year (shown in the above chart), but may appeal to investors hoping for shares to rebound.
The strong results from NXP may have stopped the decline, since shares peaked in February at $32.99. Seasonal weakness in technology may limit gains. The matter is similar for SanDisk Corporation (NASDAQ:SNDK), whose shares are priced for perfection.
The most compelling investment may be Microsoft Corporation (NASDAQ:MSFT), though investors might want to wait for shares to pull back. The company demonstrated that its enterprise and office software sales are limiting the impact of declining PC sales. Investors could hold shares and be paid a dividend of $0.92 per share, or a yield of 3.01%.
The article Which Tech Stock to Buy Post Earnings? originally appeared on Fool.com.
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