TIME Apple

Apple Just Passed a Massive Milestone

Consumers Shop At An Apple Inc. Store Ahead Of Earnings Figures
Michael Nagle—Bloomberg/Getty Images

The news of its massive quarter has finally settled in

It took a few days, but Apple’s blow-out quarterly earnings report — driven by strong iPhone and Mac sales and bolstered by the largest stock repurchase program in the history of capitalism — has finally made its way through Wall Street’s algorithms and into Apple’s share price.

The stock closed Thursday at $104.83, up 1.8% for the day, 7.2% for the week and 50% from April 2013, the cruelest month, when it dipped into the high 300s.

Speculators who bought a lot of calls in September 2012, when Apple was approaching an intraday high of $705.07 ($100.72 post-split), will never get their money back.

But investors who held on to their shares through the rout of 2012 and 2013 are back in the green.

Apple is now not only the world’s most valuable public company, but it has left the nearest contenders in the dust. The top four market caps:

Apple: $617.9 billion
Exxon: $401.4 billion
Microsoft $371.0 billion
Google $369.0 billion

TIME Earnings

Heavy Growth Puts Drag on Amazon’s Bottom Line

Amazon logo
Lionel Bonaventure—AFP/Getty Images

Big spending and lower-than-expected forecast for the holiday season put a cloud over the e-commerce giant’s shares

Amazon reported a disappointing third quarter on Thursday in the period leading up to holiday season. Investors responded by pummeling the stock in after-hours trading, driving it down 10% to $280 a share. Here are the key points from the earnings report.

What you need to know: Amazon traditionally funnels much of its profits into expanding its already gargantuan business, resulting in razor-thin margins — and this quarter proved no different. The e-commerce giant reported a loss of $437 million on revenues of $20.58 billion, a 20% revenue increase year-over-year, but well below Wall Street’s estimate of $20.84 billion.

A significant chunk of that money went into content and technology — a spending area that jumped 40%. That’s unsurprising given Amazon’s announcement last quarter that it would spend over $100 million on original video content, including the well-received original TV show, “Transparent” with “Arrested Development” actor Jeffrey Tambor.

The big numbers: $27.3 billion and $30.3 billion. That’s the sales range Amazon expects for this holiday season, the company’s busiest time of the year. That represents growth of between 7% and 18% versus last year, but again, less than what analysts forecast.

What you might have missed: Amazon had an extremely busy summer. It acquired Twitch, the video-game streaming site, for $1.1 billion, unveiled a credit card reader for the smartphone called Amazon Local Register and brought its same-day grocery delivery service, Amazon Prime Fresh, to New York. Amazon also launched the Fire phone, which is widely believed to be a dud. On Thursday’s earnings call, CFO Tom Szutak suggested it was too early to call the Fire phone a failure given its launch just 90 days ago. Said Szutak: “When ever you launch something new, there’s a wide range of outcomes, but it’s also early.”

This article originally appeared on Fortune.com

TIME Earnings

Microsoft’s Revenue Jumps, But Profits Decline on Job Cuts and Nokia Costs

The Microsoft Corp. logo sits on display during the Microsoft Worldwide Partner Conference in Washington, D.C. on July 16, 2014.
The Microsoft Corp. logo sits on display during the Microsoft Worldwide Partner Conference in Washington, D.C. on July 16, 2014. Bloomberg—Getty Images

Shares of the tech giant rose 4% in after hours after reporting a 25% sales bump in the first quarter of its 2015 fiscal year

Microsoft posted a 25% sales bump in its most recent quarter, beating Wall Street predictions on the strength of improved personal-computer sales as well as added revenue from the mobile phone business that the company Microsoft acquired from Nokia for $7.5 billion earlier this year. Here are the key points from Thursday’s Microsoft earnings report.

What you need to know: Sales improved to $23.2 billion in the first quarter of its 2015 fiscal year, which was also Satya Nadella‘s second full quarter as CEO of the company. But at the same time, Microsoft’s profits dipped more than 13%, to $4.5 billion, or 55 cents per share. The drop in profits was attributed to a $1.1 billion charge the company took in connection with massive layoffs, first announced over the summer, along with some ongoing costs of integrating Nokia’s handset business.

Microsoft got $2.6 billion from phone hardware sales in the most recent quarter, thanks to its new handset business, while the company’s unit that handles corporate sales grew revenue by 10% overall to $12.3 billion. The latter figure includes a 2.7% bump for commercial licensing sales, which cover server programs and corporate Windows and Office products.

The big number: Nadella has been putting a lot of focus toward selling Microsoft’s cloud-based business services, and the company said Thursday that its commercial cloud revenue, including sales from Office 365 and Azure cloud platform, grew 128% in the first quarter. Overall, the company reported a 50% jump in sales for its “Commercial Other” line, which includes the cloud products, to $2.41 billion. This is a closely-watched part of Microsoft’s business, as investors want to be sure that the tech giant is nimble and modern enough to be a big player in the cloud services market. Microsoft’s shares jumped almost 4% in after-hours trading, so it seems like investors were pleased with the company’s efforts.

What you might have missed: Microsoft also reported a 74% first-quarter revenue increase, to roughly $2.5 billion, for its computing and gaming hardware segment, reflecting sales growth for the company’s Xbox gaming console as well as the market-wide rebound in PC sales. Microsoft revealed Thursday that it sold 2.4 million Xbox consoles during the first quarter, representing a 102% bump. However, the company did not specify whether those sales came from the new Xbox One, which launched in 28 new markets during the quarter, as opposed to older iterations of the gaming system.

This article originally appeared on Fortune.com

TIME stocks

Stocks Are Soaring on Strong Earnings, Giving the Dow Its Best Day of 2014

A trader works on the floor of the New York Stock Exchange (NYSE) on Oct. 21, 2014 in New York City.
A trader works on the floor of the New York Stock Exchange (NYSE) on Oct. 21, 2014 in New York City. Spencer Platt—Getty Images

The Dow lately up some 300 points thanks to big gains from 3M, Caterpillar

U.S. stocks soared in afternoon trading on Thursday, buoyed by a handful of companies releasing strong earnings reports along with some positive economic reports in the U.S. and Europe.

The Dow Jones Industrial Average was recently up over 300 points, or 1.9%, enjoying its best day since October 2013. The closely-watched index received a major boost thanks to two Dow 30 companies, 3M and Caterpillar, releasing strong quarterly financial reports on Thursday morning. Both companies’ shares were up more than 5% Thursday afternoon after 3M reported a sales bump and Caterpillar posted strong earnings thanks to effective cost-cutting. General Motors and apparel company Under Armour also posted strong earnings on Thursday.

The Nasdaq composite and S&P 500 are on pace to post their third winning day of the week, despite small dips on Wednesday, as the two indices were lately up 2% and 1.7%, respectively.

The market was also propped up today by news that jobless claims filed in the U.S. over the last month fell to their lowest average in more than 14 years. Another positive note came from the Conference Board’s index climbed 0.8%, suggesting continued economic growth in the U.S. carrying over into 2015. Meanwhile, investors were also encouraged by positive Eurozone economic reports, including a rebound in German manufacturing and a drop in unemployment in Spain.

After slogging through several volatile weeks recently, the U.S. market has managed to recover some of its losses this week. The Dow is also on pace today to notch its third positive finish so far this week, including Tuesday’s 215-point jump, and has already grown by 2.3% this week. Meanwhile, the S&P 500 actually had a four-day winning streak broken on Wednesday, when the blue-chip index dipped 0.7%. The S&P 500 is now up 3.9% for the week, while the Nasdaq has improved by almost 5% so far this week.

This article originally appeared on Fortune.com

TIME stocks

Apple’s Big Week Continues As Stock Price Hits a New High

An Apple Inc. logo is displayed on the company's iPhone 6 Plus during the sales launch of the iPhone 6 and iPhone 6 Plus on Sept. 19, 2014.
An Apple Inc. logo is displayed on the company's iPhone 6 Plus during the sales launch of the iPhone 6 and iPhone 6 Plus on Sept. 19, 2014. Bloomberg—Getty Images

Technology giant is on track to surpass its record close of $103.30

Shares of Apple passed their all-time high point during morning trading Wednesday, putting an exclamation point on an already strong week for the tech giant.

Apple gained steadily to start the day and eventually touched a high-water mark of $104.11 per share, wiping out the company’s previous all-time high of $103.74 from early September. (In June, the company announced a 7 to 1 stock split.) While Apple’s shares have come back down a bit more recently, they are still up about 1% on the day and they have gained almost 6% in value so far this week. The company’s market cap is around $607 billion.

The uptick in share price follows in the wake of Apple reporting strong earnings on Monday that included a 12% third-quarter sales bump and record profits thanks to better-than-expected iPhone sales. The company also launched its new mobile payments system, Apple Pay, on Monday and the much-hyped Apple Watch is set to hit customers’ wrists early next year.

Investors will surely be keeping their eyes on Apple’s stock throughout the day today. The company’s record closing high is $103.30.

Of course, even the all-time high price for Apple stock likely won’t be high enough for Carl Icahn. The activist investor sent an open letter to Apple CEO Tim Cook earlier this month asserting his belief that Apple’s shares should be worth more than $200 each and that the company should dramatically increase its share buyback program. Icahn owns almost a 1% stake in Apple.

This article originally appeared on Fortune.com

TIME Earnings

Yahoo’s Minuscule Growth Enough to Exceed Expectations

Yahoo! President and CEO Marissa Mayer delivers a keynote address at the 2014 International CES in Las Vegas, Nevada.
Yahoo! President and CEO Marissa Mayer delivers a keynote address at the 2014 International CES in Las Vegas, Nevada. Ethan Miller—Getty Images

The search giant had seen its revenue fall in four of the previous five quarters

Yahoo said Tuesday that third-quarter grew 1%. Here are the most important points from the company’s earnings report.

What you need to know: Yahoo beat Wall Street estimates with $1.15 billion in third-quarter revenue, up from $1.14 during the same quarter last year. Surprising analysts is always nice, but the Internet search giant should be especially happy about the revenue bump, even if it is just a 1% increase. Sales had declined in four of the previous five quarters, including a 3% year-over-year drop in this year’s second quarter.

Yahoo also reported earnings excluding certain costs (and a huge windfall from selling shares in the initial public offering of Chinese e-commerce giant Alibaba) of 52 cents per share, which trounced analyst predictions of 30 cents per share. The company’s profit jumped to $6.8 billion compared with the help of $6.3 billion in cash, after tax, that the company netted from selling a chunk of its Alibaba shares in September. In the year-ago quarter, Yahoo had reported a profit of $297 million.

Yahoo CEO Marissa Mayer described the quarter in a statement as solid.

“We achieved this revenue growth through strong growth in our new areas of investment – mobile, social, native and video – despite industry headwinds in some of our large, legacy businesses,” Mayer said.

Yahoo shares soared in after-hours trading, gaining almost 2.8% after finishing Tuesday trading up by 2.3% – one of many stocks on the tech-heavy Nasdaq composite to enjoy a strong day.

The big number: Yahoo said its third-quarter mobile revenue topped $200 million, the first time the company has revealed the amount of money it makes from showing ads on mobile devices. The company said gross mobile sales for the year will exceed $1.2 billion. Mayer said that Yahoo’s mobile investments – which include a $300 million acquisition of mobile analytics startup Flurry – have paid off for the company. In the current quarter, mobile revenue made up only around 17% of overall sales, far less than rivals like Facebook and Twitter.

“Not only are our mobile products attracting praise and engagement from users and industry awards, they are generating meaningful revenue for Yahoo,” Mayer said.

Meanwhile, Yahoo’s display ad revenue – the equivalent on online billboard ads – dipped again, falling 5% year-over-year to $447 million in the third quarter. (Interestingly, Yahoo said in its earnings release that the number of ads sold in the third quarter increased about 24%, but that seems to have been offset by the fact that the price of each ad declined by an equal amount.) Search ads continue to grow for Yahoo, though, with third-quarter revenue in that sector rising 4% to $452 million.

What you might have missed: Yahoo plans to spend some of the more than $6 billion in cash it netted from the recent Alibaba IPO on one or more tech start-up acquisitions, according to The Wall Street Journal. Mayer is expected to discuss Yahoo’s plan for potential acquisitions as well as cost-cutting measures – a discussion that comes a few weeks after activist investor Starboard Value revealed it had taken a stake in Yahoo and pushed for Mayer to reduce costs and consider a combination with AOL.

This article originally appeared on Fortune.com

TIME Earnings

Coke Expands Its Cost-Cutting Program as Earnings Slide

Cans of Coca-Cola
Getty Images

The North America market remains a problem for the beverage giant and its top rival PepsiCo

Beverages giant Coca-Cola reported a 14% decline in third-quarter net income on Tuesday on a muted volume performance. Here’s what you need to know.

What you need to know: The North America market remains a problem for Coke and top rival PepsiCo, with both of the consumer-products behemoths reporting muted results for that market in the latest quarter, even as data shows Americans are spending more at grocery stores. Coke’s North America unit case volume was down 1% in the latest period, while Pepsi earlier this month reported flat revenue for the Americas beverages business.

Consumers are spending more on fresh produce, fresh grocery products and in the beverages aisle, favoring juices, flavored waters and other items that have fewer calories and less sugar than what Coke and Pepsi use in their products. Demand for carbonated soft drinks, the biggest category in the beverages business, has suffered a nearly decade-long slide. Coke on Tuesday said the “Share a Coke” campaign helped the company gain share in the sparkling beverage segment in North America, but volume still declined. Demand was also weaker for juices and sports drinks, though demand grew for tea, energy drinks and water.

Coke also didn’t post especially strong growth in any of the other markets it serves to help offset the North America weakness. Volume grew just 2% in Latin America and the Asia Pacific, and it feel 5% in Europe. The Eurasia and Africa region’s volume grew 5%.

The big number: 53 cents — that’s the adjusted profit Coke reported for the third quarter, and it matched the year-ago level and also what analysts had projected. The reported bottom line was dragged lower by $270 million in charges tied to a move to refranchise some bottling partners in North America.

Revenue totaled $11.98 billion, falling slightly short of the $12.12 billion projected by analysts. Citing some currency exchange fluctuations, Coke said it now expects profit for all of 2014 to be “below its long-term EPS growth targets.”

What you might have missed: Coke is targeting annualized savings of $3 billion per year by 2019. Coke issued a second press release Tuesday morning touting an “expanded productivity program” (typically, corporate lingo for cost-cutting) and a move to streamline its operations. While Chief Executive Muhtar Kent said Coke sees a challenging macroeconomic environment in 2015, the company’s plans to restructure its global supply chain, among other moves, will help the beverages company achieve a profit before tax target of 6% to 8%.

This article originally appeared on Fortune.com

TIME Fast Food

McDonald’s Lays Out Fix for Deepening Sales Decline

A McDonald's restaurant sign on March 12, 2013 in Mill Valley, California.
A McDonald's restaurant sign on March 12, 2013 in Mill Valley, California. Justin Sullivan—Getty Images

The solution? Focus on food quality, digital strategy

Another quarter, another terrible set of results from McDonald’s.

And the company thinks focusing on food quality and digital payments is the trick to shaking its longstanding doldrums.

The world’s largest restaurant chain by revenue reported on Monday that comparable sales last quarter fell 3.3% (worse than the 3% drop analysts expected, according to Consensus Matrix) and that profit fell 28%, with trouble in every single major market.

McDonald’s has been hit by a number of setbacks, ranging from Russia closing some of its restaurants, to a scandal engulfing one of its big meat suppliers in China last summer. At home, McDonald’s is dealing with aggressive competition, especially for breakfast offerings, lower income customers cutting down on eating out and menu additions that have annoyed guests by slowing service.

McDonald’s CEO Don Thompson said in a statement more bad news was coming: “The internal factors and external headwinds have proven more formidable than expected and will continue into the fourth quarter.” He added that U.S. comparable sales growth would likely be negative for the 12th straight month.

In the U.S., comparable sales for the quarter ended Sept. 30, comparable sales decreased 3.3% as fewer customers came in to eat and competitors ramped up their efforts. More alarmingly for McDonald’s, its operating profit for the region fell 10% as efforts to fix its ongoing, growing U.S. problems fell flat.

So Thompson said the company’s new U.S. president,Mike Andres, is flattening the unit’s organizational structure to make it nimbler and to let restaurants respond more quickly to local needs. He is also updating its marketing to emphasize food quality, and simplifying the menu to reduce wait times.

Comparable sales in Europe—McDonald’s biggest market—were weak, falling 1.4%, more than expected, as the ongoing crisis in Russia and Ukraine hurt sales. Over in Asia, a big hit to business in China and Japan results led comparable sales to fall 9.9%

Thompson has a big job ahead of him, so he laid out some broad principles and initiatives he hopes will fix McDonald’s globally. Those include investing in updating its image and service, along with new technology to update McDonald’s for today, make better use of tech to facilitate ordering, payment and mobile offers (it will accept Apple Pay) and in what sounds like a hint of potential job cuts, a review of the company structure to determine how much fat there is and whether money can be redeployed to its digital strategy.

“McDonald’s third quarter results reflect a significant decline versus a year ago,” Thompson, CEO since 2012, said. “By all measures our performance fell short of our expectations.”

This article originally appeared on Fortune.com

TIME Companies

Apple’s Growth Stays Strong in Latest Quarter

People walk past the Apple logo at the Apple Store at Grand Central Terminal in New York.
People walk past the Apple logo at the Apple Store at Grand Central Terminal in New York City Timothy A. Clary—AFP/Getty Images

Tech-giant reports beat analyst expectations with strong sales of iPhones and Mac computers. Sales of iPads fell, however

Apple on Monday reported a 12.7% bump in fourth-quarter profit, sending shares up nearly 1% in after-hours trading to just above the $100 mark. Here are the most important points from the tech giant’s latest earnings report.

What you need to know: Apple crushed analyst predictions by posting sales of $42.1 billion in the fourth quarter, which was more than a 12% increase over the same period last year. The company reported $8.5 billion in profits, or $1.43 per share, which is an improvement of $1 billion year-over-year. Fortune’s Philip Elmer-DeWitt recently polled a few dozen analysts for their Apple quarterly predictions and every last one said to expect a record quarter for the company, including average sales and earnings bumps of at least 7.1% and 11.9%, respectively.

In July, Apple’s revenues grew by 6%, but came in just below analysts’ expectations despite a 12.6% bump in Q3 iPhone sales.

The big number: Apple said it sold 39.3 million iPhones during the fourth quarter, which beat analysts’ estimates and represents an 11.6% increase over the 35.2 million sold during the same quarter last year. The fourth quarter included September’s unveiling of Apple’s new iPhone 6 and iPhone 6 Plus and the company said in a press release announcing the fourth-quarter results that strong iPhone and Mac sales helped drive a record month of September.

Mac sales jumped 25% year-over-year, to 5.5 million, while iPad sales declined for the third quarter in a row. Apple, which just revealed its new iPad Air 2 last week at a product-launch event, said Monday that its iPad sales were down more than 7%, to 12.3 million, in the fourth quarter.

What you might have missed: Apple’s strong fourth-quarter results came after the company’s mobile-payments system, Apple Pay, went live on Monday along with an update to its mobile operating system, now known as iOS 8.1. The launch came on the heels of Apple announcing it had signed up another 500 banks to support the Apple Pay platform. Apple Pay is expected to compete with PayPal and other online systems. The entire mobile-payments market had more than 11 million users last year and could grow to have more than 36 million users in 2016, according to eMarketer.

This article originally appeared on Fortune.com

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