Update Microsoft (MSFT)
Microsoft (MSFT) reported fiscal second quarter earnings on January 28.
The really good news for investors was what wasn’t in the blowout numbers. And what’s happened to the company’s business since then.
The second quarter results were good enough on their own. (Microsoft’s fiscal year ends in June.)
The company reported earnings of 60 cents a share. Once you added back in $1.7 billion in deferred revenue and about 14 cents a share in earnings from sales of Windows 7 that Microsoft decided it would recognize in future quarters the earnings picture looked even better at 74 cents a share. Wall Street analysts had included that deferred revenue in their estimates of 59 cents a share for the quarter. That made this is a 15 cents a share earnings surprise.
The company attributed the surprise to better than expected sales of its new Windows 7 and Windows Server 2008 R2 software launched in October. Through the second quarter Microsoft had sold 60 million Windows 7 licenses, making it the fastest selling operating system in history, according to the company.
But what’s really interesting for investors who want to know not what Microsoft did in the quarter but what the stock might do going forward is that the company reported it still hadn’t seen a significant contribution to sales from corporate—known as enterprise—purchases of Windows 7.
Google’s earnings are good news–let me count the ways
Google’s (GOOG) good earnings news is an indicator of something, but just what?
On October 15, after the market close, Google reported earnings of $5.89 a share, 47 cents a share above the consensus estimate of $5.42. Revenue, after traffic acquisition costs, climbed 8.4% from the third quarter of 2008. That was about $160 million ahead of the Wall Street consensus of $4.24 billion.
Update Microsoft (MSFT)
Everybody seems to agree that Windows 7 will boost sales at Microsoft (MSFT). The disagreements are over by how much and when?
The software, a favorably reviewed replacement for Microsoft’s widely reviled Vista operating system, goes on sale on October 22.
The pent up demand is potentially huge. Estimates say that 80% of the companies running their PCs on a Microsoft operating system never upgraded to Vista. Vista was introduced in 2007 and Windows XP goes back five years before that so these machines could be running software that’s as much as seven years old.
And about 80% of companies say they plan to switch to Windows 7 in the next two years, according to ISI Group.
Apple and Google go head to head in China’s mobile phone market
Ladies and gentlemen. In this corner, wearing the Macintosh red trunks, Apple (AAPL) and its partner China Unicom(CHU)
In the other corner, wearing the Chrome trunks, Google (GOOG) and its partner China Mobile (CHL).
That’s the lineup that’s about to cross gloves in China’s smartphone market later this year, according to The Financial Times.
Apple is days, weeks, months away from signing an exclusive, three-year deal with China Unicom, the country’s No. 2 wireless operator, for its iPhone.
Google is about to launch a line of smartphones based on its Android operating system with China Mobile, the country’s biggest wireless operator.
At stake is not just China’s wireless market but momentum in the global battle over smartphones.
Same old bear or brand new bull? I’m afraid the answer is “Yes”
Has the stock market rally that has seen the Standard & Poor’s 500 index climb 44% off the March 9, 2009 low ended the bear market that began in October 2007?
Or is the bear still fully in charge and the recent rally merely a typical bear market rally?
Deciding what to do now with your portfolio hinges on how you answer that question. If this is a new bull market, then you should be fully invested, no? But if it’s still a bear market, it’s no time to back off the conservative, cash-heavy stance of the last 18 months.
So which is it, bull or bear?
Unfortunately, I think the answer is: “Yes.” This is both a bull and a bear market, depending on what time period you choose for your analysis. That isn’t going to make anyone looking for a simple answer happy, but, hey, sometimes reality isn’t simple and investors who want to make money just have to deal with it.
So, let me explain how a market can simultaneously be a bull and a bear and give you a strategy for coping with that ambiguous reality.
