Google’s Smooth Sailing in First Quarter Acquiring Motorola Mobility

Google’s first quarter as a hardware company, as well as a search engine, was a good one. Stand alone revenue for the company was up 21% with cumulative revenues, including its revenues from Motorola Mobility, up 35% to $12.2 billion year over year, and up 15% quarter over quarter. The revenues from Motorola were simply $1.3 billion for the quarter.

Although the earnings call did not give much guidance on its future in hardware sales, the Motorola Razr sold very well. As reported by Reuters, “Investors have a wide range of questions about Google's expansion into the hardware business, where margins are low and competition with the likes of Apple Inc and Samsung Electronics is fierce.” There are also questions if Google will design a hig-end mobile phone that can rival Apple’s iPhone.

The Chief Business Officer highlighted YouTube’s broadcasting of the London Summer Olympics which should provide a big bump in viewership. Quoted from the earnings call, “Thousands of partners are making six figures [through YouTube].”

The core business of Google is search advertising which has been undergoing pressures of lower cost per clicks which translates into lower margins for the company. Quoted from the Reuters article, “The cost per click for Google's online search ads continued to decline in the second quarter, falling 16 percent year-on-year. But some analysts highlighted a quarter-on-quarter 1 percent gain in second quarter CPCs.”

Integration of Google applications was also highlighted. The so-called “knowledge graph” shows a cluster of information and related topics that aggregate from a search term.

Also noteworthy things include the all-new “jelly bean” operating software from google which is reaching critical mass. What’s more, Google Play has exceeded its twentieth million download.

Investors were very well pleased with Google’s quarterly results pitching the stock higher by just over 2% in regular hour trading, and an additional 2.72% to $609.20 a share in after-hours. Investment research from Morningstar gives Google’s stock 4 out of 5 stars, citing the challenges to succeed in its acquisition of Motorola Mobility. Their search advertising dominance leaves researchers with conviction that it will persist.

Microsoft has banner quarter despite recording negative earnings

Microsoft posted its first quarter of a net loss in its 26-year existence. A $6.2 billion charge from the pricey acquisition of aQuantive, an online ad agency made their quarterly earnings a net loss of $0.06. Analysts had been forecasting quarterly earnings of $0.62. The Hollywood Reporter writes, “Thanks to a massive $6.2 billion charge announced a couple of weeks ago, Microsoft on Thursday recorded its first quarterly loss in its 26-year history as a public company.”

Apart from their blighted acquisition, Microsoft performed well with above 20% growth in operating cash flow. In the earnings call, Microsoft’s CFO emphasized their core strength as a search engine and portal. They also mentioned customer service is at an all time high.

Microsoft’s major search engine is Bing, a meteoric second to Google’s dominance in the search market. Their products also performed very well, namely the Xbox become more of a household commodity, getting more usage with the advent of movie rentals and the like on its versatile gaming console.

When looking at the financial performance of Q4 apart from the spotty charge for the acquisition, it is clear Microsoft had a banner quarter with record revenues, operating cash flow and earnings per share. Investors rallied on the skewed news, shrugging off the aberration of its first negative earnings per share in company history.

Operating income was up 12% at $6.9 billion for the quarter. Cash flow from operations grew a significant 29% of $7.7 billion. It goes to show smart investors are more concerned with operating income and cash flow from operations. In addition, investors may feel the acquisition was still a good decision, despite it being cost prohibitive. Granted, Microsoft is strategizing itself for a gain in search advertising and advertising revenues.

Some of the brightest spots in their quarterly results include the following: Lync software growth of 45%; Windows enabled phones up 50% quarter over quarter; and 115 billion minutes on Skype, up more than 50%.

‘Dark Knight Rises’ Presale Breaks Record

With 60,000 IMAX tickets to see the Batman trilogy at AMC theaters, it’s not hard to see why box office projections are spiking beyond $480 million. The “Dark Knight Rises” is the third and final installment to the trilogy which has brought life to complex characters in Batman.

At $40 a ticket, the pre-sale comes to $2.4 million, the marathon viewing starts at 6 p.m. to prequel the opening night on Friday. As reported by the Los Angeles Business Journal, “The Kansas City-based movie theater operator [AMC] said the sales shattered the previous record for its movie marathon events — 30,000 for the Ultimate Marvel Marathon in May, before the release of ‘The Avengers’.”

The story is driven by the lies that end the “Dark Knight”, where Batman is perceived as a street thug when he is really the city’s protector, and the duplicitous Harvey Dent is seen as a crime fighting hero. Director Christopher Nolan embodies his characters with complexities that motivate them to heroism. Instead of flat characters that are taken for granted in the movie, Nolan gives them a three-dimensional aspect that makes the story lively. Plot development is also one of Nolan’s strong suits.

“Dark Knight Rises” also plays on the dark themes of its prequel with a finale that is quite bleak. Quoted from the L.A. Times, “‘The Dark Knight Rises’ might be the bleakest, most despairing superhero film ever made. It uses a wholly terrifying villain to emphasize the physical vulnerability of a hero we sometimes forget is no more than human.”

An hour of the movie is shot on IMAX film cameras giving an extra rich cinematic quality. Even regular theaters will experience more depth thanks to cameras used.

The cast from the previous film are back, which is one of the main reasons it has garnered so much momentum as far as anticipation is concerned. Although fans are distraught about how it will end, it’s still a movie that will be seen countless times.

You can see the trailer here on YouTube. Make sure to buy your tickets as soon as you can, if you want to see it sometime soon.