Tech Stocks Slip On Earnings Weakness

It has been a difficult 24 hours for tech earnings, with Apple, Yahoo, and VMware losing ground after reporting their quarterly results.

Apple, despite growing its revenue and earnings per share, reported flat net profit and an iPhone sales figure that, while higher than the year prior, disappointed the investing class. Its stock fell in after-hours trading and today dropped a corresponding 7.91 percent in regular trading. Its shares are flat in after-hours trading.

The damage totaled nearly $40 billion in market cap.

Yahoo reported its earnings today, showing revenue decline but an earnings per share win. Despite rising search revenues — for which Microsoft is at least partially responsible — Yahoo’s revenue decline highlights continued weakness in its core product makeup. If it can’t grow its top line, its earnings per share have a low ceiling on growth. As TechCrunch reported earlier:

Display advertising, excluding traffic acquisition costs, was $491 million down 6% compared to $520 million for Q4 of 2012. Display revenue ex-TAC was $1,737 million for the full year of 2013, a 9 percent decrease compared to $1,899 million for the prior year.

Losing revenue despite growing the very user base — mobile for Yahoo, of course — that is focused on could highlight a weakness in its business plan. Investors sent Yahoo down 2.8 percent in after-hours trading after bidding up its shares during regular trading. Yahoo’s quarter was mixed, but in all frankness until Yahoo manages year-over-year top-line growth the company is little more than a declining cash flow lashed to equity in a foreign tech company.

And finally, VMware is down 2.3 percent in after-hours trading after reporting essentially in-line earnings in decent year-over-year revenue growth.

Facebook reports tomorrow, and Twitter will be clocking in next week. Tech earnings continue, but the last 24 hours haven’t been very easy on the industry.

Top Image Credit: Flickr