Thursday, August 1, 2013

US Big Technology Corps 2Q 2013 Adjusted Earnings Down 15%.....It's on the US Congress

There are 17 US Technology Corps which have reported 2Q 2013 After-tax Adjusted Earnings of more than $400 mil each in either the 2Q 2013 or the 2Q 2012.

Adjusted Earnings are what these companies report as their ongoing core after-tax adjusted earnings in their earnings releases.

How did they do?  Not well, with their 2Q 2013 Total Earnings down 15% from the 2Q 2012.  And 10 of the 17 US Big Technology Corps had earnings declines.

The two stick-out earnings winners were Facebook, up a monster 65% and Qualcomm, up 23%.

The three stick-out winners on the Revenue increase front were Facebook, up 53%, Qualcomm, up 35%, and Google, up 19%.

The earnings quality was much better than the down 15%.  As one illustration here, these companies are required to expense up front their huge amounts of R&D expenditures, even though they receive, for the most part, huge future earnings benefits for many years from these R&D investments. 

Particularly, four companies made large R&D Investments in the 2Q 2013, which were substantially higher than their R&D Investments in the 2Q 2012:  Google $1,987 mil, up 29%, Cisco Systems $1,542 mil, up 14%, Qualcomm, $1,298 mil, up 33%, and Apple $1,178 mil, up 34%.

Clearly, the US Congress-mandated Sequester spending cuts have harmed these Technology Corps earnings in the 2Q 2013. 

Further, US Congress lack of US economic stimulation harmed these companies. 

And the US Congress lack of compromise, in even refusing to permit the US Government Budget, which has been already passed by both the US House and the US Senate, to proceed to Conference has increased business uncertainty, and thereby dampening investments in US Technology products.

Below here are the Adjusted Earnings of these 17 large US Technology Corps in both the 2Q 2013 and the 2Q 2012:



2Q 2013 2Q 2012


Adjusted Adjusted


Net Net


Income Income


From From


Continuing Continuing Increase Increase

Operations Operations (Decrease) (Decrease)

mil $s mil $s Amount %
Big Technology



Facebook                            488                            295                193 65%
Qualcomm                        1,823                        1,486                337 23%
Ebay                            822                            730                  92 13%
Texas Instruments                            469                            446                  23 5%
Cisco Systems                        2,728                        2,605                123 5%
EMC                            907                            867                  40 5%
Broadcom                            436                            435                     1 0%
Oracle                        4,114                        4,143                (29) -1%
Google                        3,233                        3,362              (129) -4%
IBM                        3,579                        4,077              (498) -12%
Hewlett Packard                        1,698                        1,949              (251) -13%
Apple                        6,900                        8,824          (1,924) -22%
Microsoft                        4,390                        6,123          (1,733) -28%
Intel                        2,000                        2,827              (827) -29%
Western Digital                            477                            872              (395) -45%
Dell                            372                            761              (389) -51%
Seagate Technology                            447                        1,028              (581) -57%

   


Total all 17                      34,883                      40,830          (5,947) -15%