Google, Microsoft Disappoint in Earnings Report; Stocks Plunge

Jacob Harper |

Two of the biggest names in tech, Google Inc. (GOOG) and Microsoft (MSFT) reported their Q2 earnings after the bell July 18, and both came up well short of analyst expectations.

Microsoft

Microsoft’s fourth quarter loss in 2012 (Microsoft’s fiscal year ends mid-calendar year) was largely attributed to a write down stemming from the disastrous 2007 acquisition of advertising company aQuantive. The total loss attributed from that failed acquisition totaled $6.2 billion.

The tech company also announced in early July that they would be restructuring under the motto "One Microsoft." The company also announced a write off to the tune of $900 million associatd with the Surface tablet. Teh company recently announced they'd be slashing the price of the RT Surface tablet to $350 to meet consumer demands for cheaper tech.

Microsoft reported net income of $4.97 billion, or $0.59 per share, versus a $492 million loss, or loss of $0.06 per share, from the same period a year ago. Revenue for the quarter was $19.9 billion, as compared to $18.6 billion from the previous year. Analysts were expecting a profit of $0.75 per share on revenues of $20.7 billion.

Their stock is down 4.91 percent to hit $33.68 a share.

Google

Google has also been recently affected by an acquisition, and while it certainly hasn’t been as big of an unmitigated disaster as the aQuantive deal, it has affected Google’s bottom line.

The tech giant acquired cell maker Motorola on May 22, 2012 for $12.5 billion, and with it, incorporated hardware production into their stable of products. The move so far has not been nearly as successful for Google as their search division, which still absolutely dominates that market.

Google reported net income of $3.23 billion, or $9.54 per share, versus the $2.79 billion, or $8.42 per share, from the same period a year ago. Revenue for the quarter was $14.11 billion, as compared to $12.2 billion from the previous year. Analysts were expecting a profit of $10.78 a share, on revenue of $14.4 billion.

Google's stock plunged on the bad news. It's down 4.91 percent to hit $865.95.

 

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Companies

Symbol Name Price Change % Volume
GOOG Alphabet Inc. 763.29 0.77 0.10 187,490
MSFT Microsoft Corporation 60.03 -0.19 -0.32 1,935,871
ABGLY Acacia Mining PLC ADR 8.88 0.00 0.00 0

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