Tech Earnings Revealed

EARNINGS: Microsoft

In after-hours trading, Microsoft shares fell by up to 2% following its earnings report, which exceeded analysts' predictions but presented a modest revenue forecast for the next quarter.

The company expects fiscal third-quarter revenue to be between $60 billion and $61 billion, slightly below analysts' expectations. Despite this, Microsoft forecasts lower costs and operating expenses for the quarter.

Microsoft reported a 17.6% increase in year-over-year revenue, with net income rising to $21.87 billion. Its Intelligent Cloud segment saw a 20% revenue increase, driven by Azure and other services. The company's Productivity, Business Processes, and More Personal Computing segments also showed revenue growth.

During this quarter, Microsoft completed its largest acquisition of Activision Blizzard, introduced new products, and continued with layoffs, including cuts in LinkedIn and its gaming unit following the Activision deal.

Earnings:

• Earnings: $2.93 per share, vs. $2.78 per share expected

• Revenue: $62.02 billion, vs. $61.12 billion expected

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GOOGLE: Earnings Are In

After reporting ad revenues below expectations, Alphabet's shares fell by over 6% in after-hours trading. Despite achieving its fastest revenue growth since early 2022 with a 13% increase, its $65.52 billion ad revenue didn't meet the anticipated $65.94 billion.

Google Cloud displayed significant growth, becoming profitable after years of losses. However, the overall results didn't fully satisfy investors, given the rapid growth of competitors like Facebook and TikTok.

Alphabet's focus on artificial intelligence has led to further layoffs, adding to the significant job cuts from last year. The company also introduced Gemini, a new AI model, and incurred substantial severance packages to the bottom line.

Net income for the quarter jumped 52% to $20.7 billion, with an increased operating margin. Revenue from Alphabet's ventures like Waymo and Verily grew while their losses narrowed.

Earnings:

• Earnings per share: $1.64 vs. $1.59 expected

• Revenue: $86.31 billion vs. $85.33 billion expected

ELON: Compensation Package Rejected

A Delaware judge just voided Elon Musk's $56 billion compensation package from Tesla, citing the board's failure to demonstrate its fairness or evidence of proper negotiations with Musk. Chancery Court Chancellor Kathleen McCormick ordered discussions on directing Musk to return his received compensation, with an option for Musk to appeal to the Delaware Supreme Court.

In her ruling, McCormick highlighted the package's record-setting size in corporate history, which significantly contributed to Musk becoming the richest person in the world. The compensation plan is based on Tesla's market value and revenue targets and was questioned for its fairness to shareholders.

The ruling emphasized that Musk, rather than Tesla's board or shareholders, controlled the decision-making process regarding his compensation, indicating conflicts of interest and a flawed approval process.

Headlines You Need To Know: 🎙

• Walmart announces 3-to-1 stock split

• Private payroll growth slowed in January

• Starbucks slashes guidance after missing the mark

• Boeing narrowed losses in earnings report

• Paramount takeover attempt

• Fed has set the stage for cuts

A Sportswear Merger

Tom Brady, a seven-time Super Bowl champion, is merging his TB12 health and nutrition company and his Brady clothing line with the training brand Nobull. Brady will become the second-largest shareholder in this deal, following Mike Repole, the BodyArmor founder who acquired Nobull last year.

Nobull, founded in 2015 by former Reebok executives and based in Boston, primarily sells its products online. The company will keep its name post-merger, aiming to become a comprehensive wellness brand. Repole, known for selling beverage brands like BodyArmor to Coca-Cola, took a majority stake in Nobull in July. In fact, the last major athlete that Repole partnered with was the late Kobe Bryant. Brady and Repole want Nobull to become one of the biggest names in the sportswear universe.

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