Sunday, July 21, 2013

On a Mix of Corporate Earnings Results

As corporations continue to report second quarter earnings results, comments from firms delivering positive results included General Electric’s CEO Jeff Immelt - “we executed in a business environment that was slightly improved versus the first quarter. Emerging markets remain resilient, and in the U.S. we saw strong growth in orders this quarter. Europe is stabilizing but still challenged” and Honeywell’s CEO David Cote - “we remain focused on seed planting, funding cost savings initiatives across the portfolio, and remaining flexible given the continued uncertain global economic outlook”.

At the same time, technology firms that disappointed investors included Microsoft, its Chief Financial Officer Amy Hood said “we know we need to do better” after it had weak sales of Windows 8 and a $900-million write-off for its Surface tablet; Intel, it’s new CEO Brian Krzanich said "I've made it Intel's highest priority to create the best products for the fast growing ultra-mobile market segment" and Google missed expectations as its average cost-per-click for advertising dropped 6% from last year and 2% from last quarter.

MY TAKE
While revenue growth remains muted, many firms continue to cut costs as a way of delivering corporate earnings. Within the technology sector, some participants continue to encounter turbulence as desktop computer use declines and mobile devices become more pervasive.

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