It was the best and worst of times on Wall Street last week, as earnings announcements made a star of Apple, and monkeys of tech giants Intel and Symantec.
After wowing the media with its stunning-looking iPhone at the annual MacWorld Expo, Apple reported eye-popping numbers for first quarter 2007, largely due to the iPod franchise.
Apple has been under a microscope in recent months, amid revelations of improper stock option grants and high-level defections. But all was forgiven on Wednesday, as frantic sales of 21 million iPods during the holiday shopping season boosted Apple’s quarterly profit to $1 billion, almost double the profit it made during the same quarter in fiscal year 2006.
The story was different at the Santa Clara, Calif., headquarters of Intel, as well as at the offices of Apple’s Cupertino, Calif., neighbor Symantec.
A shabby earnings report from Intel and earnings warning from Symantec earlier last week sent shudders through Wall Street, which had barely digested the previous week’s similar warnings from Intel competitor AMD and software giant SAP.
After reeling from the effects of a corporate reorganization that included heavy layoffs, Intel reported a profit of $1.5 billion for the fourth quarter, down 39 percent, compared with the same period last year.
At $9.7 billion, Intel’s revenue exceeded Wall Street estimates of $9.4 billion, according to analysts polled by Thomson First Call. But that wasn’t enough to keep Intel’s stock from taking a dip of almost 6 percent in midday trading on Wednesday, especially after news that the EU may move ahead with antitrust charges against the company over business practices in the European chip market.
Overall, the company said it had a poor performance because it was unable to reduce its fixed costs, despite record sales of microprocessors. CEO Paul Otellini called 2006 a “challenging year” and promised better results in 2007.
The finger of blame was pointing at weak sales of enterprise storage technology at Symantec, which warned of lower-than-expected financial results for its most recent quarter and for the fiscal year, which ends in March.
Symantec won’t report third quarter results until Jan. 24, but said revenue would be in the $1.29 billion-to-$1.31 billion range, down from previous estimates of between $1.32 billion and $1.35 billion. The news sent Symantec’s stock tumbling more than 17 percent by Wednesday afternoon.
While Symantec blamed a new ERP installation for a hit on its bottom line, it’s clear that the integration of storage vendor Veritas is taking longer and costing more than Symantec had planned, according to Melissa Grady, an analyst at Technology Business Research.
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