Tech Giants Report Strong Earnings, Google Disappoints
Microsoft and other tech giants beat analysts' estimates, reporting stronger than expected quarterly results on Thursday, but Google uncharacteristically fell short.
Microsoft and other tech giants beat analysts' estimates, reporting stronger than expected quarterly results on Thursday, but Google uncharacteristically fell short. Google, IBM, and Intel announced their Q4 and fiscal year 2011 results after the markets closed on Thursday.
Though Google reported a strong close to its fiscal year, it missed analysts' expectations, resulting in 9% drop in shares during after-hours trading. Google recorded revenue of $10.58 billion for the quarter ended Dec. 31, representing an increase of 25% over Q4 2010 -- the first time Google has recorded quarterly revenues of more than $10 billion, according to CEO Larry Page. Net income for the quarter came in at $2.71 billion, up from $2.54 billion from Q4 2010.
Overall revenue for fiscal year 2011 was $37.9 billion, up 29% from fiscal year 2010.
Google's Q4 miss could be attributed in part to a decline in the average cost per click. Though paid clicks increased between Q3 and Q4 2011 by 17%, cost per click declined by 8% over the same period. Additionally, Google's international revenue for Q4 was not as strong as in previous quarters due to unfavorable exchange rates.
Intel, for its part, exceeded analysts' expectations with its Q4 earnings call, despite a dramatic 57% drop in revenue from its Atom microprocessor group. For the quarter ended Dec. 31, the chip maker reported revenue of $13.9 billion, a 21% increase over the year-ago quarter. Net income rose by 6% from Q4 2010 to total $3.4 billion.
For fiscal year 2011, Intel reported a record $54 billion in revenue, an increase of 24% from fiscal year 2010.
Though analysts have been lowering their PC sales projections, Intel's PC Client Group grew its Q4 revenue by 17% year over year. Revenue for its Data Center Group was also up for the quarter by 8% year over year.
In a prepared statement, Intel CEO Paul Otellini called 2011 an "exceptional year" for the company. "With a tremendous product and technology pipeline for 2012, we're excited about the global growth opportunities presented by Ultrabook systems, the data center, security and the introduction of Intel-powered smartphones and tablets," he said.
Intel's shares rose 0.86% in after-hours trading.
Also beating analyst expectations was IBM, despite an 8% year-over-year revenue decline from its Systems and Technology group for the quarter ended Dec. 31. Overall, the company reported Q4 revenue of $29.5 billion, up 2% from the year-ago quarter. Net income for the quarter was $5.5 billion, up 4% from Q4 2010.
For fiscal year 2011, IBM reported overall revenue of $106.9 billion, an increase of 7% from fiscal 2010's revenue.
Standout product groups for IBM included the WebSphere product line, which increased its quarterly revenue by 21% year over year, and the Tivoli product line, which grew its quarterly revenue by 14% year over year. Additionally, the company said full-year revenue from its cloud products "more than tripled" 2010's revenue.
IBM shares rose 2.7% in after-hours trading.