IBM and Intel
gave technology investors something to cheer about with better than expected quarterly results late Tuesday, but Yahoo
and Motorola
disappointed Wall Street with their results.
IBM shares soared 5% in late trading after the company reported earnings of $1.45 a share, a dime better than expected and up 19 cents from the year-ago quarter. Sales rose 5% to $22.6 billion, also more than Wall Street analysts were hoping for, and global services revenues of $12 billion also topped forecasts.
Intel wasn’t the growth story IBM was, with sales dropping 12% to $8.74 billion due to its price war with AMD , but that was still better than the $8.62 billion Wall Street was expecting. Earnings of 22 cents a share also beat estimates, and fourth-quarter sales guidance of $9.1-$9.7 billion was more or less in line with $9.46 billion estimates. About the only weak spot in the report was that the company predicted only a slight improvement in gross margins to 50%, suggesting that pricing pressures will continue a while longer. Intel shares tacked on 2% after hours after losing 3% during the day on a Goldman Sachs valuation downgrade.
Yahoo and Motorola didn’t fare nearly as well.
Yahoo continued its string of disappointments, meeting earnings estimates with a bottom line of 11 cents a share, but sales after traffic acquisition costs of $1.12 billion, while up 20%, were below $1.14 billion forecasts. Fourth-quarter sales guidance of $1.15-$1.27 billion was also light, coming in below $1.31 billion estimates. But Yahoo shares got a boost after hours on news that it’s finally launching its new ad platform.
Motorola fared worse, shedding 8% after sales of $10.6 billion, while up 17%, missed $11.1 billion forecasts, and fourth-quarter guidance was also light. Novellus also fell in late trading after missing estimates.
Stocks fell during the day Tuesday on conflicting wholesale inflation data, with the headline number falling sharply and the less volatile core number showing a big jump in inflation.
EMC fell on its results, as did Adtran
.
Broadwing surged on a buyout from Level 3
.
Sapient fell after stock option troubles claimed its CEO.
The Nasdaq lost 19 to 2344, the S&P 500 shed 5 to 1364, and the Dow lost 30 to 11,950. Volume rose to 2.47 billion shares on the NYSE, and 2.23 billion on the Nasdaq. Decliners led 20-12 on the NYSE, and 18-11 on the Nasdaq. Downside volume was 70% on the NYSE, and 64% on the Nasdaq. New highs-new lows were 189-14 on the NYSE, and 127-30 on the Nasdaq.
