The tech sector continued to slump in Friday’s session amid weak earnings from Microsoft Corporation(NASDAQ:MSFT), while Apple Inc.(NASDAQ:AAPL) and Google Inc(NASDAQ:GOOG) continued to slid. NASDAQ Composite(INDEXNASDAQ:.IXIC) slumped -53.35 (-1.74%) to 3,019.52.
Google Inc(NASDAQ:GOOG) shares were showing relief rally in the opening session at least after a slump of 8% in yesterday’s session as the company’s early issued results due to a glitch, which had widely analysts’ estimate. However, the stock turned lower and now down another 2% to $682.15, off session high of $706.70.
In the third quarter, the search engine posted EPS of $9.03 and revenue of $ $11.33 billion, both missed analysts target by significantly with EPS fell short of $1.62 and revenue by $550 million. The key concern during the quarter was the company’s revenue excluding Motorola, saw a growth of below 19% for the first time after showing well above 20%’s growth rate in the past few quarters.
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Although, the volume of ads jumped by 33%, but the average price paid by web-search advertisers to Google per click put pressure on the company, which fell 15%.
They key concern remains that the increased use of mobile devices may put further pressure on the company’s earnings.
Apple Inc.(NASDAQ:AAPL) continued to be under pressure and fell 2.70% to $615.73 after plunging over 1.70% in yesterday’s session. After the lackluster earnings by various blue chip tech companies, investors are trading AAPL cautiously as yesterday analyst at BMO said that the company’s earnings forecast for the current quarter could be bit more conservative.
Moreover, the analyst reduced its iphone estimate by 4 million to 46 million, stating supply constraints. The supply shortage is not the new problem for the company as the demand for iPhone is much larger than supply.
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Yesterday’s fall was further sparked after Verizon (NYSE:VZ) commented that they saw supply crunch in the latest quarter. Following this, analyst at Jefferies & Co. reduced its projections r total iPhone 5 sales unit sales in the quarter to 5 million from 8 and 10 million.
However, the key question remain can the worl’d largest company by market value will be able to buck the trend and report higher than estimated earnings and forecast better quarter?
The stock has already lost 10% from its peak of $705.07 on heavy supply crunch for its iPhone 5.
A123 Systems, Inc.(NASDAQ:AONE) edged up another 495 after soaring 37% in yesterday’s session on reports it will appeal to a bankruptcy judge for the right to entertain better offers for its lithium-ion battery business and gains receives approval to use debtor financing from Johnson Controls (JCI) to keep operations running. Lost in part of the political mumbo-jumbo over the failure of the company is the bigger theme that automakers are starting to see better opportunities by focusing on the hybrid-electric market, rather than the all-electric, on a purely economic rationale.
Clearwire Corporation(NASDAQ:CLWR) plummets 10% after SoftBank CEO Masayoshi Son says he remains open to bidding on MetroPCS, a move that would further lower the odds of Sprint buying Clearwire in full near-term. Shares have already tumbled this week in response to other bad news (I, II) on this front, but remain up 45% since the first reports of a Sprint/SoftBank deal arrived.
Advanced Micro Devices, Inc.(NYSE:AMD) has a plan to reduce its work force by 15% or 1,800 jobs by the end of this year to trim its spending amid dwindling sales. It expects to record a restructuring expense in the fourth quarter of about $80 million.
Recently, the company had trimmed its earnings projections for the third quarter which ended last month, stating poor demand across all product lines largely to the challenging macroeconomic environment (which is quite beneath the control of the company).
Advanced Micro Devices, Inc.(NYSE:AMD) slumped 15.50% to $2.21.