Dow Drops on Geopolitical Day, but Morgan Stanley and Google Report Earnings

German sausage manufacturers forming a "meat cartel" to jack up prices on your favorite bratwurst is annoying -- but it's not a "geopolitical disaster." The Dow (DJINDICES: ^DJI  ) plummeted 161 points Thursday for its worst loss in three months after the Malaysia Airlines crash, and Israeli invasion of Gaza, stoked worldwide investor fears.
 
1. Google still figuring out "mobile" challenges
Why Google Google's (NASDAQ: GOOG  ) (NASDAQ: GOOGL  ) mixed earnings report when you can so much more easily read about it here? On the bright side, Google's $12.7 billion in quarterly revenue topped Wall Street's expectations, and represents a hefty 22% increase from the same period last year.

But, as users increasingly turn to mobile phones instead of desktop computers for their Internet browsing and shopping, Google hasn't kept up. Google's share of mobile ad spending fell from 50% of the market to 41.5% in the last couple of years, while Facebook's revenues jumped 9% in the space (#watchoutforzuck).

The takeaway is that Google still goes big or goes home -- like its high capital expenditures of $2.65 billion on future growth, building data centers, and God knows what else in its "Google X" labs. Plus, its spring "hiring spree" of 2,200 new employees brings its total up to 52,000 Googlers (who probably just like the company's free lunches).
 
2. Microsoft fires 18K in its biggest job cut ever
Welcome to Microsoft! (Oh yeah... you're fired.) Shares of your dad's favorite tech firm, Microsoft (NASDAQ: MSFT  ) , jumped 1% Thursday on news from new CEO Satya Nadella that 18,000 people are being laid off. It's time to cut the fat, and that means 12,500 Nokia employees will be suffering through Microsoft's biggest job cut ever.
 
The power-bald-headed Steve Ballmer, Microsoft's previous CEO, acquired Nokia last September. Those Finnish engineers were a proud people, and many of them have idled as Microsoft's mobile phone biz went nowhere. The rest were axed Thursday in what's a prime example of corporate "synergies" that executives talk about for an acquisition -- eliminating redundant workers.

The takeaway is that the stock rose after the announcement on investor enthusiasm. Unlike the crappy Windows XP that somehow still works in your cubicle, investors were refreshed by this bold change from the new CEO. Layers of Microsoft bureaucracy stink like an onion, hurting profitability -- the new CEO clearly hates onions.

3. Morgan Stanley's earnings lookin' good (again)
Morgan Stanley is famous for being Goldman's No. 2, but the investment bank is starting to stand out with awesome recent performances -- like its $1.9 billion in second-quarter profits, up a whopping 97% from last year. That's partly thanks to an accounting adjustment, but it beat estimates -- and feels darn good to the avid Morgan Stanley MarketSnacks readers.
 
The most impressive thing is that Morgan Stanley's (NYSE: MS  ) stock trading revenue topped Goldman's -- $1.8 billion vs. $1.6 billion. Besides investment banking activities, the company's conservative Wealth Management business is becoming more important and more profitable as a reliable revenue source.
 
The takeaway is that other banks' profits fell in the quarter, but MS's rose like a beautiful financial phoenix. The CEO's plan to decrease reliance on the volatile investment banking and trading business is working, and the stock is up 24% in the past 12 months.

As originally published on MarketSnacks.com

Bank of America + Apple? This device makes it possible.
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming it's destined to change everything from banking to health care. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3033925, ~/Articles/ArticleHandler.aspx, 9/19/2014 12:17:33 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement