These 3 Tech Stocks are Plunging

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) was down just five points as of 11:30 a.m. EDT. IBM (NYSE: IBM  ) was the index's worst performer, falling more than 3% following disappointing quarterly earnings results. Along those lines, Google (NASDAQ: GOOG  ) (NASDAQ: GOOGL  ) and Travelzoo (NASDAQ: TZOO  ) were down 4% and more than 7%, respectively, after posting poor earnings.

Jobless claims come in below expectations
Initial jobless claims, a indicator of the strength of the U.S. labor market and the economy as a whole, came in better than expected on Thursday. According to the Department of Labor, 304,000 workers filed for benefits last week, less than the 315,000 that some economists had anticipated.

Given that the Dow was largely flat in late-morning trading, disappointing earnings results from a number of major tech components may have offset the positive jobs data.

IBM falls after earnings
IBM was underperforming the Dow after reporting a quarter that fell below expectations. While earnings per share were roughly in line with analysts' expectations, revenue came in light ($22.48 billion versus $22.91 billion).

IBM offered guidance that was better than expected, promising full-year earnings per share of $18 (compared to a $17.84 estimate). Still, that wasn't enough to avoid a sell-off. Investors may have focused on IBM's hardware and systems storage revenue, which both fell 23% on a year-over-year basis.

Source: Enrique Dans via Wikimedia Commons.

Google disappoints
Like IBM, Google also appeared to be the victim of poor earnings results. While quarterly revenue fell in line with analyst expectations, earnings per share missed the consensus estimate by roughly $0.15. During the earnings call, Google management cited the acquisition of Nest Labs as a reason for the miss, as the $3.2 billion purchase contributed to Google's expenses. But there were also some troubling trends afflicting Google's earnings -- cost-per-click (what Google charges advertisers) fell roughly 9%.

Travelzoo tumbles following profit decline
Travelzoo quarterly revenue declined by 5% while its operating income fell 13%. 

Travelzoo has been a disappointing investment in recent months, and Thursday's sell-off only adds to its losses. Year to date, the online travel deal specialist is down more than 15%; at roughly $18 per share, it is worth only about one-fifth of what it was worth in mid-2011.

Google strikes first
The first watches powered by Android Wear will hit the market in the coming months, but Apple is sitting by idly. If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.


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  • Report this Comment On April 17, 2014, at 1:11 PM, GaryDMN wrote:

    Just Google's battle with reality. Their weapons are hype and vaporware. It may deserve a 20 P/E at best, do the math.

  • Report this Comment On April 18, 2014, at 2:46 AM, Interventizio wrote:

    For a LT Ibm investor, the longer the company stays at a low price level, the more shares the company can buy back. That's what Buffett says. It all depends on how long you intend to hold IBM: the company is changing and it may take years for revenue to pick up.

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