In late December, Oracle (NASDAQ:ORCL) did something it rarely does: It missed on its quarterly earnings. And the stock plunged 13% on the news.
So, was this a sign that tech spending was slowing down? Or was it an issue specific to Oracle, such as with its hardware business?
Well, based on the batch of earnings reports Thursday, it looks like tech still is showing strength. Here’s a rundown:
Microsoft (NASDAQ:MSFT): The company saw a nice boost from its infrastructure software business — especially with servers — as well as the Xbox segment (the Christmas season was particularly strong).
As business spending picks up, Microsoft is benefiting from its broad suite of products. They include offerings like Exchange, SharePoint, Lync, Windows Server and Dynamics CRM.
Yet there were some troublesome results from the Windows franchise. In the quarter, revenues fell by 6%. While the business still generates substantial cash flows, the long-term prospects look bleak — especially as Microsoft has lagged in areas like tablets and smartphones.
IBM (NYSE:IBM): Even though IBM is 100 years old, it still knows how to keep up the momentum. In the latest quarter, revenues increased by 4%, and profits came to $5.5 billion, or $4.62 per share.
Key to IBM’s success is the software business, which was up 9%. The company has been aggressive with its acquisitions over the years. And going into 2012, it would not be surprising if it moves more into cloud computing services.
But IBM always is about the long haul. To this end, the company believes it will achieve its 2015 goal of achieving $20 per share in earnings.
Intel (NASDAQ:INTC): The company looks poised for a strong 2012, with key drivers being ultrabooks, smartphone chips and infrastructure systems (especially for data centers). In fact, Intel is likely to remain a big beneficiary of cloud computing, which requires lots of processing power.
For the prior year, Intel posted a strong 24% increase in sales to $54 billion. Keep in mind that the company has invested heavily in research and development, which has resulted an impressive offering of innovative technologies.
Google (NASDAQ:GOOG): Among Big Tech, the search giant certainly had the worst report — a rare miss — and the stock was off more than 8% in Friday trading. While the consensus was for $8.41 billion in revenues and $10.49 per share in earnings, the company instead posted $8.13 billion and $9.50 per share, respectively.
Kevin Kelleher has an excellent look at what might have caused Google’s miss. He points out that a troubling development was Google’s 8% drop in its cost-per-click rates. Unfortunately, the company was vague about the rationale, saying there have been some changes in ad formats and search algorithms.
Yet investors are wondering: Is Facebook making big-time inroads in Google’s business? With the company expected to go public soon, it has lots of motivation to increase its monetization efforts — which probably means taking business away from Google.
Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.
