Holy Triumvirate of Earnings

The Big Three in tech released their quarterly earnings last week, and I don’t think any of them were beating their chests too hard, including Apple.

I mean this isn’t Amazon territory where sales in the billions results in a few pennies of profit.

Nothing Apple or Microsoft can do, other than earn a few billion in PROFIT each quarter, seems to impress Wall Street.

Yet Google can do no wrong. Check out the stock performance going back a year. Google is up nearly 50%, Microsoft is up maybe 5% and look at Apple: down 30%. Want to guess which of those generated by far the most profit last year?

I charted the reported revenues and profits from last week and a few thoughts jumped to mind.

  • Say what you want about Microsoft, they are still generating massive profits.
  • How long till Google is larger than Microsoft in terms of revenues? Two quarters? Three maybe?
  • The success of the lower priced iPad and iPhone 4S are hitting Apple’s bottom line.

Microsoft is struggling to find much traction in mobile products. Google has to be concerned that mobile ad rates are 40% less than those on the desktop. And Apple might be looking at some saturation of its highly profitable iPad business.

But make no mistake. These are three strong and profitable companies, each with a war chest that will keep them in the game for many years to come.



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