4 tech giants set to report results

Google, IBM, Intel and Microsoft will post after the close. All face challenges in 2012.

By Charley Blaine Jan 19, 2012 12:37PM
Charley BlaineTech stocks overall are enjoying a solid rally so far this month. The question is whether the rally can continue after four tech giants report results after Thursday's close.

The four are Google (GOOG), IBM (IBM), Intel (INTC) and Microsoft (MSFT), all big and powerful. The smallest of the four -- Google -- is likely to report $29 billion in revenue for 2011.

Analysts see sizable earnings gains for Google and IBM, the potential for a small gain for Intel, and flat earnings for Microsoft. (Microsoft publishes MSN Money.)

Google's prospects are still driven largely by the global advertising market. IBM's business increasingly is driven by computer services and consulting. It also is a way at looking at the health of Europe, which generates about 25% of its business. Intel and Microsoft are vulnerable to the prospects for the personal computer business. (Microsoft owns and publishes Top Stocks, and MSN Money site.)

Here are the numbers to watch for.

Google: Earnings are projected at $10.49 for the quarter, up about 20% from a year ago. The consensus revenue estimate is $8.4 billion, up 31.9% from a year ago.

Post continues below.
IBM: The Street estimate is for earnings of $4.62 a share, up 10.5% from a year ago. Revenue is estimated at $29.7 billion, up 2.5% from a year ao.

Intel: The consensus estimate is for earnings of 61 cents, up from 59 cents a year ago. Revenue is projected at $13.7 billion, up 19.7% from a year ago's $13.7 billion.

Microsoft: Earnings are estimated at 76 cents, down a penny from a year ago, with revenue up 5% to $20.9 billion.

Microsoft shares are having a good January
So far this year, Microsoft shares have outperformed the other three, up nearly 9%, compared with losses of 2% and 1% for IBM and a gain of more than 5.5% for Intel.

For 2011, IBM was the top performer of the four, up 25.3%, with Intel up 15.3%, Google up 8.7% and Microsoft down 7%. IBM's gain was second-best among the 30 Dow stocks.

The key questions
Google will face questions on two issues: the health of the advertising market, and its capacity to manage a manufacturing business. The company is set to buy Motorola Mobility (MMI).

With IBM, investors will look for insight on the potential impact of the eurozone crisis and currency headwinds in 2012.

Poor results from software maker Oracle (ORCL) last month and a cautious quarterly outlook by consulting firm Accenture (ACN) have spooked investors already worried about the ramifications of economic problems in Europe.   

But last week, SAP (SAP), the biggest maker of business software, cheered investors with better-than-expected sales and profits, thanks to strong demand for software and data analytics products.   

Investors will also be keen to get a feel for new CEO Virginia Rometty, a longtime IBM manager who succeeded Sam Palmisano on Jan 1.   

Intel warned last month that the damage from flooding in Thailand -- the world's largest producer of computer drives -- persists and would curtail December-quarter earnings.

Analysts increasingly believe that there's a bigger problem that also affects Microsoft: Demand for PCs may even fall short of the industry's scaled-back expectations as consumers tighten their belts or opt instead for gadgets such as the Apple (AAPL) iPad.

The worries about the PC  business are big enough that Wells Fargo analyst Jason Maynard cut his estimate fiscal-second quarter results. Maynard now sees revenue of $20.88 billion and profits of 75 cents a share. That's down from $21.1 billion and 79 cents. For the 2012 fiscal year, he goes to $2.70 a share from $2.80.

Maynard sees global PC sales growth at 2% to 3% in 2012.

What about Apple?
Apple reports fiscal-first-quarter results Tuesday.

The consensus is for earnings to jump 56% to $10.03, thanks to big sales of iPhones, iPads and even Macintosh computers. Revenue is expected to jump 45% to $38.8 billion.

The shares are up 5.9% this month.

A new version of the iPad is expected to be announced sometime this year, perhaps as early as this month. Apple introduced the iBook 2 on Thursday. The product is meant to make digital versions of textbooks available on the iPad and beef up the education content available for the tablet computer.
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