LOS ANGELES (Reuters) - Microsoft Corp’s quarterly profit fell slightly as the world’s largest software maker was hit by slower-than expected growth in computer sales.
Amazon.com posted a quarterly revenue and operating income forecast that fell short of analysts’ estimates. Its shares fell almost 10 percent. [ID:nN27148561]
”Amazon is a disciplined company, they’re long-term focused. The spending that they’re doing reflects the strength of their growth.
”Topline still seems to be really strong, but to meet this demand they’re having to invest in fulfillment and distribution and that’s taking a little bit of a short-term margin toll.
”Yes, Amazon’s pulling back based on this, but this doesn’t affect the long-term story at all. If you believe in the story and can see the upside that they have, they’re doing the right things to meet that demand.
“When you look at the size of the opportunity, and how relatively under-penetrated e-commerce still is, and the opportunity ahead of Amazon to basically gain share, they’re making the right decisions.”
“Amazon discussed on its prior two calls its need to invest in its fulfillment and distribution and this is consistent with that. But I think people were expecting kind of a blowout when they looked at data points that suggested that e-commerce spending potentially had the strongest quarter in three years.”
”Operating income (guidance) for the first quarter is well below the consensus and the stock is taking a big hit. It could be that they’re back to spending mode.
”Expectations were high here, and the stock ran up today.
“The slight miss on revenue for the fourth quarter is noise. They’re going to have to explain what the operating income (forecast) miss is. That’s a decline from the first quarter of last year and well below expectations. I‘m very curious what’s going on.”
He said operating income expectations had been for around $274 million.
”Looks like it was disappointing on the top line number. Operating margins improved slightly but not as much I was expecting. Seems like it was a competitive holiday season.
“There were a lot of expectations the revenue number would be $13 billion and that just didn’t happen. And going forward, it’s going to be the revenue number and sustainable operating margins that what will dictate the share price.”
”I really think that Kinect represents the most legitimate opportunity we have seen for the Xbox to drive some profit. I do think there is a meaningful catalyst there.
”When I looked at Steve Ballmer at CES, none of it was terribly groundbreaking. It was the opposite of an Apple event.
”But the Windows phone looks good. I do think that Windows phone 7 is proving to be an interesting alternative to the Blackberry.
“I guess the nut of it is, Microsoft is starting to do something better and they are not tripping on themselves and that counts for something.”
”Outstanding numbers when you take a first look at it but when you delve into them, Windows missed expectations by $300 million.
“The big surprise is huge strength in the Office business, $600 million above expectations. That is really being driven by the Office 10 release.”
”This company has got some momentum behind it. The core businesses have been setting records. They’ve got a nice, tight focus on their core marketplaces. They’ve got discipline in terms of cost controls and driving earnings. They’re the best in the space in terms of returning cash to shareholders.
“Basically, we’ve gotten over 300 million Windows 7 licenses sold. I mean, PCs are not disappearing. Put that into perspective with 7 million tablets sold last quarter from Apple. Clearly there are disruptions in the landscape, but some of the negative viewpoints are overblown.”
“It seems like there is strength across the board. I think it’s fair to say the Windows division numbers were light. The weakness in the consumer PC market has been widely known.”
Reporting by Lisa Baertlein, Jennifer Saba, Ritsuko Ando, Liana B. Baker, Alexei Oreskovic, Martinne Geller, Doris Frankel and Bradley Dorfman