Alphabet Inc 3Q Results – Google Growth Powered by Mobile Business

Alphabet

Alphabet Inc, the newly formed parent company of Google, has announced its third quarter results. Google’s growth trajectory is powered primarily by its mobile business and Alphabet’s revenue is expected to continue to be driven by Google’s core advertising business which contributed to 90.4% of the overall sales in the third quarter.

Google CEO, Sundar Pitchai, also announced that Google Play is the company’s sixth product to have crossed the one-billion-users mark after Chrome, Android, Search, YouTube and Search.

Although expenses went up by 9.7% to $13.97 billion, yet it was 74.7% of the total revenue as compared to 77.4% in the third quarter of last year. This reduction in cost versus revenue ratio reflects Chief Financial Officer, Ruth Porat’s tight control over spending.

As per reports from Fortune, Google CEO Sundar Pitchai said that more than 50% of the search queries are from mobile devices. The users employ either the dedicated Google search app or search through the browser on the mobile.

Ruth Porat said that sustained efforts at improving ad delivery and formats including video advertising powered the revenue growth and also added that growth in the United Kingdom and the US especially reflected the increase in mobile searches. Also, paid click volume (how many times users click on an ad) showed a year-on-year growth of 23% which exceeded estimates by most analysts.

The share price of Alphabet increased over 10% during extended the trading hours backed by the news that the company, for the first time, intends to repurchase nearly $5.1 billion worth of its Class C shares. Analysts believe that the share repurchase program is an effort to increase investor confidence, which requires a boost, despite healthy cash flows and reasonable valuation.

Alphabet’s other ventures, including the auto venture, the Calico biotech venture and Google Fiber, among others, have been given separate entities and are collectively dubbed ‘Other Bets’.

Indian PM Narendra Modi Invited to Facebook Headquarters: Set to Field Questions in Townhall

Narendra Modi, the Indian Prime Minister, has been invited to attend Facebook’s Townhall to be held on September 27 at its Silicon Valley headquarters.

Prime Minister Modi will field questions from the public during the townhall proceedings, announced the social media giant.

‘Prime Minister Modi and I will discuss how communities can work together to address social and economic challenges’. Mark Zuckerberg posted on Facebook. PM Modi is also scheduled to visit Tesla’s car factory in Fremont, the SAP Center in San Jose and Google headquarters as part of his US visit.

Both Prime Minister Modi and Facebook have invited the public to ask questions, either through the social media or via Modi’s mobile app before the question and answer session commences at 9.30 AM PT on September 27. There were already 24, 000 comments on Mark Zuckerberg’s post with questions being asked on multiple issues including, but not limited to, online education, censorship and poverty.

On his own Facebook page, PM Modi wrote, ‘The interaction will cover a wide range of issues and will surely be a memorable one’. The Indian Prime Minister has already received flak on privacy issues for trying to enhance online access to government services under a scheme dubbed ‘Digital Services’. And Facebook might have some heated questions of its own to ask PM Modi.

Last year, the social media giant started Internet.org, an initiative to bolster basic internet services in developing countries. However, Facebook faced a lot of disapproval, including from India, for the effort. Companies like media giant Times Group and travel website Cleartrip.com opted out of Internet.org claiming that the initiative was against net neutrality, a policy to keep the internet free and open to all.

The criticism came from a strong public opinion that the Internet.org initiative will limit the use of free internet web services like Wikipedia and Facebook. However, Facebook denies these claims and said that Internet.org was opened up in May for developers to build any service within the platform. Facebook is a real giant in the social media industry going by its user and sales figures; as of June 2015, FB had 496 million active users monthly in the Asia Pacific region and made $1.03 billion in sales as of the first half of the year from that geographical region.

Apple Stock Price Gets a Big Boost from Tim Cook’s Email Response on Reassuring Sales in China

After Tim Cook, Apple CEO, responded to CNBC’s ‘Mad Money’ host, Jim Cramer’s email, that Apple has been witnessing reassuring sales growth in China, the stock prices got a big boost. Apple is said to have traded at 5% higher on the back of this reassuring mail from the CEO.

According to nytimes.com, the ‘Mad Money’ host was inspired by a comment made by Skyworks Solutions on his show. The company, which supplies chips to Apple, said that despite strong sales in China, its stock plummeted driven by the fall in the global markets. This supposedly gave Mr. Cramer an idea and he shot off an email asking for Timothy D Cook’s comment and clarification on Apple sales in China, which was an important geography in terms of sales and exposure for the company.

Considering that Apple is one of the most exposed US companies in China and that the Yuan devaluation could spell trouble for the company, Tim Cook responded very quickly with a very positive note, ‘I get daily updates about the company’s sales performance in China and although I cannot predict the future, the growth in business in July and August continues to be strong and reassuring.’ This sent the stock prices soaring with a gain of over 5%. Cook also added that iPhone activations in the country have seen strong growth in the last month despite the economic issues there.

In response to this, forbes.com reported that this encouraging message was a good sign and although it is not possible for the Apple CEO to come out to reassure investors every time the market falls, such mid-quarter updates are quite common and which many companies are happy to provide. However forbes.com cautioned investors that this comment does not mean that Apple stocks can be bought with gay abandon. It only means the downslides in Apple stock price does not reflect on the fundamentals of the company and is related to the market downfall. So, if the market witnesses another selling bout, Apple stocks can also be affected, the website warned.

Credit Score of Facebook Friends Could Affect your Loan Application

Facebook is taking another step into the world of electronic payments. This time, they are joined by credit agencies, banks and other government bodies.

While the electronic payment system is slowly encroaching conventional payment methods, only a handful of companies have successfully managed to integrate them. Making payments using your smartphone is a possibility and Apple Watch favors the same. However, the patent which Facebook has registered is quite controversial and may provoke some of the users to abandon the social networking website permanently.

The patent has been granted to Facebook by the United States government based on which lenders can check the credit score obtained by the friends of the applicant. The system will not be implemented on a case by case basis. Rather, it will focus on the average credit score obtained by the applicant’s Facebook friends. If it is below average, the lender can immediately reject the application.

It saves them the time and money invested in researching every single application they receive on a daily basis. On the other hand, if the gross average is good, the loan application will be processed further. Such a unique patent to access user information and of their friends has been with Facebook for many years, since the time they acquired Friendster. However, they applied for revoking the patent in 2012 which has been approved now.

The patent also allows the website to ban random users from sending spam to a person they are not directly friends with and hide select people who don’t share any connection with them. The technology will allow the lenders to login to the platform and acquire personal information of people in their friends’ circle. While this is a clear violation of policy and may irate a lot of users, you should know the fact that when you sign up for an account and use it, you have already agreed to all their terms and conditions.

Besides, using the credit score of a couple of friends to determine the earning capacity of an individual is a baseless idea. Just because their friends have unpaid loans doesn’t make the person a defaulter. Besides, it could also affect the people who don’t have previous banking history and are seeking a loan.

At the moment, it is still in its early stages and the internet is abuzz with criticism. A majority of the population is against this new Facebook patent, which may or may not reach the people, based on how things go in the near future.

Goldman Sachs’s Michael Evans Appointed as the New President of Alibaba

Michael Evans is a veteran in the industry who has served for twenty years at Goldman Sachs. He is an extremely valuable asset to Alibaba during a crucial time.

The company has appointed him as their new President and Evans will be responsible for all business decisions and expansions from now.

With this announcement, Alibaba, a leading retailer in China has confirmed that they are not going to bask in the laurels earned in their home country. Most retailers in the country would prefer enjoying their success as long as it lasts because being world’s largest populated region has its own advantages. They have one of the biggest consumer base in the world and it is much easier to cater to a specific group of audience than risk selling products to an international audience.

Alibaba dared to be different and has confirmed that they are going to find ways to change the way the e-commerce industry is around the globe. Michael Evans served as the Vice Chairman at Goldman Sachs. He was the Chairman of Asia and led the Global Growth Marketing team before he signed up to be a board member with Alibaba in 2014.

After serving for a year in the board, he has been given the prestigious position of being the president of the company. A press statement confirmed that he will continue to be in the board, besides taking care of his new responsibilities. Alibaba is aiming to become a solo platform that will facilitate cross border e-commerce transactions.

Manufacturers and retailers in different continents hesitate to sell their products to other countries because a lot of hurdles populate the path. What with taxes, Customs to freight and delivery, it is difficult to execute on a foreign land, which the mediator aims to get rid of. When the expansion takes place, Alibaba confirms that anyone will have the freedom to sell goods in and out of China. They can also use the platform to export goods to any part of the world without investment risks.

Alibaba already owns a bunch of firms in different sectors including T-Mall, Tao Bao, Juhuasuan and Alitrip. With a 1.3 billion Chinese population, companies would seldom venture outside because they have all the user base they need. But, Alibaba wants to go global in the next few years. Their new president Evans will be in charge of executing the international growth strategy in a successful manner.

General Motors Co. Planning to Invest $877 Million to Revamp Truck Plants

General Motors is busy in setting up some of their truck plants so that they are future proof and ready to manufacture the revamped editions of their trucks in 2018.

The company, in an official statement, confirmed that they are planning to invest a sum of $877 million. The investment will be split between two different manufacturing plants, one in Flint and the other in Michigan. A significant change in terms of body, design and features is expected to embrace the large pickup trucks and the sport utility vehicles in the next two years. GM wants to ensure that their plants are equipped so as to handle the production process and are capable of integrating the proposed new features in the vehicle models.

After the initial revamp in the Flint plant, the manufacturing unit will have improvised assembly lines, better paint job units and body welding equipments. The unit will be assigned with the task of manufacturing some of the most popular SUVs in the market, including the Chevrolet Tahoe and the Cadillac Escalade, besides the Silverado pickup trucks.

With changing times, it is mandatory to offer innovative products that create a lasting impression among the consumers. General Motors Co. is quite aware of this fact, which is why they are going to significantly decrease the weight of their pickup trucks so that they are more fuel efficient than the current models. The weight reduction will be made possible with the help of new variants of lightweight steel combined with aluminum material. An imminent change embraces the truck plants because the tools and machinery used at the moment are not designed to produce these new vehicles.

Conventionally, the company has a tradition of closing down its factory until the renovation is complete. However, Flint, in association with four other venues including Texas, produces 60,000 trucks every month and generates more than $10,000 in revenue. In order to avoid any losses, the renovation process will be split which will allow the unit to continue the production of old trucks while the other half of the plant will be modified.

General Motors Co. has considerably increased its investment in the United States to honor the labor agreements and provide more jobs. The company has invested about $5.4 billion till now and plans to expand its horizons to new plants where they can produce small cars. Once the new plants are ready, the units will be able to produce larger vehicles with more color choices and varied specifications.

PS4 Saves Sony from Going Bankrupt, Mobile Sales Decrease

Sony has multiple divisions with a stronghold in the movies, smartphones and tablets, besides the gaming industry. In recent times, buyers’ interest in buying mobile phones has steadily decreased, which made it really difficult to sustain in the market.

In their financial call, reports confirmed that Sony is not doing well in most of their divisions except for a few. The company’s smartphone division is one area which is taking a huge blow year after year. Despite releasing some good devices including the flagship Z3+, their average sales has dropped by at least 16.3 percent in 2014. That’s a lot of market share to lose in such a short time.

While the company reported that it occurred mainly because of their lack of investment and strategic management, analysts confirmed it is caused by new entrants like One Plus, Huawei and Asus. These small time manufacturers have become huge in such a short period and sell flagship phones at one third of the price.

Obviously, buyers are interested in those flagship alternatives that are cheaper and can readily be exchanged when a new one is launched. Sony is not interested in focusing on budget phones but have a strong eye on the Z3+, among other flagship devices. The market has changed a lot in recent years, which the company refuses to accept. Due to repetitive losses, they sold off ‘Spiderman’, one of their biggest superhero licenses to Marvel.

While the reports sound negative in every aspect, Sony managed to make thrice the profit which is pegged at $665 million. The credit for this success goes to their gaming system, the Playstation 4 console that saved the day. The company has sold over three million units in 2015 and a total of 25.1 million units so far. It adds a major share to the total revenue earned by Sony in the last twelve months. While PS3 isn’t selling as fast as it used to, the last gen console helped make $160 million.

Sony reported that their Playstation 4 console is selling twice as fast as Microsoft’s Xbox One in Europe. The console has won the race despite the lack of exclusive titles and holds a strong lead against its competitor. The company’s imaging division sells sensors to some of the big players in the industry including Samsung and Apple. They have made $2 billion in profit which has triggered Sony to tie up with a Japanese robotic manufacturer to create drones, as they believe it will help boost their revenue.

Facebook Earnings for Q2 – Expectations and What to Watch

Facebook will post and share their report for earnings in the second quarter, late Wednesday. The hopes for revenue and profit are high and it will be interesting to see whether Facebook has surpassed expectations.

According to many experts and analysts, Facebook should report 47 cents share in profit which is more than the 42 cents Facebook reported one year ago. However, many believe that the change might be impacted by a stronger dollar.

Facebook’s stocks have risen by 15% in the past three months and expectations will be high for the social network on Wednesday. The consensus among experts, first reported by the Wall Street Journal is around $4 billion Facebook earnings in Q2.

Expectations will also be high for the expenses by Facebook. If the expenses are high and the social network fails to beat consensus revenue, there might be problems. In the past, the company has established goodwill for investors that they can execute and surpass all ambitious goals.

Compared to the previous quarter, the number of monthly active users has increased to 1.47 billion with more than 970 million active users per day. In previous quarter, the number of active monthly users was 1.44 billion. The social network reported 1.25 million active monthly users on mobile platforms in Q1 and we can expect that number to go even higher.

With that being said, there are couple of things you should invest extra attention on, during the presentation of the Q2 earnings.

First thing to pay attention on is advertisement monetization trends during the quarter. Facebook could and should report growth in ad revenues and monetization of advertisements. The result is due to higher prices for ads, as well as lower overall number of advertisement engagements. The price-volume ratio results from increased usage on smartphones, where there are fewer ads. Ad pricing will be the key for revenue growth in the future. There should be improvements in quality, target-ability, relevance and measurement of advertisements. Expect to see growth in mobile advertising revenues.

The second area to focus your attention on is the growth in the user base. The growth rate of active users per month has rose to 3.6% in the first quarter and that trend should continue. What will be interesting to see is an update of user bases of Messenger, WhatsApp and Instagram.

Next, make sure to check the numbers for video ads, as Facebook is focusing more and more attention on videos in order to raise the growth outlook. In April 2015, the video views per day reached four billion. Just for comparison, in September 2014, that number was one billion. It will be interesting to see how the increase of video views impacts monetization.

Other platforms run by Facebook, such as Messenger, Oculus and WhatsApp contribute marginally to the overall revenue. However, that should change in the coming years and Q2 earnings report is a good place to start looking for clues.

Microsoft Gives Nokia Lumia One Last Chance to Break Even

Microsoft Corporation acquired Nokia last year with hopes that the troubled former mobile phone industry giant would make a comeback, but since the acquisition, the Windows Phones have been incurring losses.

Microsoft has indicated that it cannot keep up with the terrible liability.

In order to stem further losses, Microsoft has lined up launches of two flagship windows phones slated for release in October. In a symbolic choice, Microsoft settled for 10th of October since it will mark the 10/10 of launching Windows 10. The repetition and rhyme seems to be working in their favor, but Microsoft will have to wait until after the date to celebrate, depending on how the market will receive its products.

Microsoft will release Lumia 940 and Lumia 940 XL which will run on the Windows 10 Mobile operating system on that symbolic date. Nokia has been an interesting company that has witnessed all the major phases of the rise and fall of a company. Since the times it was a small Finnish corporation to a multinational giant, Nokia remains the unsung hero of the mobile phone industry as it was not acknowledged as the leading mobile phone manufacturer even when the other companies were trailing behind it. Now it lays disgraced and at the mercy of a buyer who is contemplating to sell it should it not resuscitate after 10/10.

No shortage of options

Since Microsoft bought Nokia, there have been positive hopes that the company may finally bounce back. But it is not that easy given that the competitors have moved with speed to occupy the territory which Nokia once ruled. Samsung Galaxy Note 5 and the new Apple iPhone 7 will definitely give Nokia which is now trading as Microsoft Windows Phones a run for its money. Microsoft has to prove to the users that the high price that its phones are being retailed at, matches the superior specifications of a premium phone failing which the clients look elsewhere. Of course, there is no shortage of options.

Lumia 940 and Lumia 940 XL remain the biggest releases of the Windows Phones. Shareholders, competitors and customers will be watching to see if Microsoft will really pull off a successful comeback Windows Phone.

After the Windows Phones pick in the dynamic industry of mobile phones, Microsoft is likely to pump more capital to strengthen the brand. On the contrary, if Windows Phones continue making losses as their predecessors, Microsoft will give the brand a wide berth and it could soon have a new owner.

Babysit Nokia

Nokia’s past is a bleak one. After making a loss of about $7.8 billion and making 7800 people jobless, Microsoft has a lot of damage to control. First, it will have to babysit Nokia which was rebranded to Windows Phones to recover from the losses until it makes profits.

Microsoft has not made an official confirmation of the launch of Lumia 940 and Lumia 940 XL, but insiders stick to the October 10th date as it coincides with the new operating system called Windows 10.

Coca Cola Reports Record Breaking Earnings, Increased Price Led to Better Revenue

Coca Cola has officially submitted its quarterly earnings report and much to the surprise of analysts, the company has managed to break their expectations.

According to the report which was submitted on Wednesday, Coca Cola confirmed that they procured 41 percent of the revenue from international markets. The net income for all shareholders has increased by 71 cents per share in 2015. In the same month in 2014, the company sold each share for 58 cents and this is considered to be an unexpected level of growth that they have attained in a short period.

A consensus estimate by Thomson Reuters confirmed that Coca Cola had made a profit of $12.16 billion which is slightly less when compared to previous year’s $12.57 billion. However, the amount of sales in global markets has increased by 2 percent which is much higher than what analysts predicted for the company earlier.

After a long break of almost two years, the company has reported an increase in their revenue in North America. Even though Coca Cola is able to make solid income from international markets due to fluctuating currency values, the unwavering value of the U.S. dollar constrains them from witnessing any drastic changes in the quarterly revenue.

Trade analysts have also confirmed that the manufacturer who promotes other drinks including Fanta and Sprite has been consistently reducing the cost of the drink in multiple regions. Their attempt to boost sales by decreasing cost per liter and increased investment in marketing campaigns have proven to be positive. The increased revenue is also being attributed to the strategy based on which Coca Cola promoted glass bottles after a long break that has a new found audience in health conscious regions.

A wide range of special marketing campaigns have been initiated in the U.S., including the popular “Share a Coke” program. These special bottles had tags like ‘friend’ and ‘legend’ printed on them. Whenever users snap a picture of the bottle or a can and post it on their social media channels, they enter a draw to win special prices.

The idea worked to a good extent. Another significant change that Coca Cola adopted to boost sales is by increasing the cost of large bottles and traditional packages in the United States. The company reduced the cost of mini cans which is considered to be the most preferred way of drinking coke in the U.S. The current value of Coca Cola is at $41.30 per share.

Microsoft Quarterly Earnings Report Shows a Record Loss of $3.2 Billion

Microsoft announced the quarterly report for the fiscal fourth quarter, showing a record loss. The company’s report shows weakness in software, an area where Microsoft is usually strong.

However, the report also shows strength in consumer-technology, areas in which the company is usually middling. Overall, the revenues for the quarter that ended on June 30 were $22.2 billion. According to the report, the biggest reason for the loss is the company’s acquisition of Nokia. Microsoft had to pay a charge of $7.5 million for the deal.

Chief executive Satya Nadella said he is proud of the results the company delivered. Under his guidance, the company shifted the focus to software and cloud services. But the results were not as good as expected.

In the fourth fiscal quarter, the company recorded just 0.2% rise in sales of software products. Most of the profit of the company comes from sales of MS Office, Windows and other products. The total sales of those products accounted for $13.53 billion. It was the slowest growth pace in the past two years for Microsoft.

For the first in history, the company will let people with existing computers to upgrade their software free of charge. Microsoft will let users upgrade to the latest Windows 10 platform, hoping that those customers will pay for add-ons like office and web-search ads and add-ons. It is a huge test for Microsoft, as the company hasn’t had success in selling add-on services.

The good news for Microsoft is that consumer divisions recorded an increase in revenue. For example, sales of the Surface tablet doubled from a year ago. Sales of the Xbox and video games rose to 27%. The company needs consumer-focused areas to do well, as Microsoft is preparing for the launch of Windows 10. The new OS, which should compensate for the lackluster performance of the Windows 8, is scheduled for release on July 29. The company’s idea is to integrate search and gaming add-ons into Windows 10, a way to generate revenue since the OS will be free of charge.

Microsoft’s shares were down by 3.9% in after-hours trading to $45.45, but they went up in 4 p.m. trading to $47.28.

Overall, in the fourth quarter, the company’s loss amounts to $3.2 billion, which is 40 cents per share. A year ago, the net income was $4.6 billion which accounted for 55 cents per share.

Microsoft also announced that the company plans to cut 7,800 jobs in the phone hardware business.

Apple – Disappointing Q3 2015 Financial Results Reflect on Other Tech Companies

Apple is a technology giant that has the power to increase or decrease the stock values. It is a claim that has been proven once again when the company’s investor call led to the fall of stocks.

Even though the company has sold a lot of iPhones in the first half of 2015, the shipments didn’t meet up with their expectations. The update released by Apple had a strong effect on other companies that sell similar products. The expected revenue is between $49 billion and $51 billion, which is huge, but it is at least $5 billion less than what forecasters had predicted earlier.

Apple lost 5pc in German trading sector, according to Nasdaq 100 futures report. Microsoft, another big company, posted similar disappointing sales records in the past quarter which led to a decline in their stock value which is now at 4pc.

Experts opine that the market will be extremely volatile in the coming months. Some of them have already started suggesting that it is not advisable to go with stocks owned by technology companies because consumer perspective is changing at a rapid pace. Smartphones and tablets are no longer in huge demand as they used to be.

In the US trade report, Apple touched a new low with stocks priced at $119.20 which triggered some investors to invest in the company. Majority of the investors refrained from doing so because Apple doesn’t have any interesting products coming up except for the iPhone 6S. Stocks don’t soar when updated versions of phones or tablets get launched which has held most people from buying the stocks.

Several technology companies including Microsoft and Yahoo have submitted net loss reports. Microsoft claimed that the Nokia acquisition has cost them a lot, which led a loss of $2.1 billion, the biggest ever reported in the company’s history. The waning search engine and news company Yahoo isn’t doing well either. Their stocks declined by 1.8pc because the sales were much below the level than analysts’ predicted.

The net loss reports led to Microsoft’s German trading value dropping by 3.8 percent, while Yahoo witnessed a 2.2 percent drop. Apart from technology giants, the commodity stocks witnessed a very high loss rate. With unexpected changes in currency and stocks, analysts are trying to come up with new theories that might help them predict the future of stocks, in the next six months.

401K Plans: When You Can Withdraw, When You Can’t

Millions of Americans enjoy the benefits of a 401K account. Simply put a A 401k account is a tax-advantaged, employer-sponsored retirement saving tool. You get to contribute money on a pre-tax basis, essentially diverting it from your paycheck into your account. A Roth 401K works much like a Roth IRA, taking post-tax contributions, which eventually can be withdrawn tax-free.

There are rules about when you can withdraw money from your 401K. You will want to avoid taxes and penalties on early withdrawals, they are significant.

Standard withdrawals both traditional and Roth 401k accounts, begin at age 59 1/2. At age 70 1/2 you must take required minimum distributions and Internal Revenue Service has rules about how much.

Non-standard withdrawals is where most people get in trouble. The rules are very stringent as you might expect. Below are a few circumstances that a person may be able to make a non-stamdard withdrawal.

  • You can withdraw money before age 59 1/2, but unless you qualify for a hardship withdrawal, you’ll likely be socked with a 10% early withdrawal penalty.
  • If you leave an employer at or after age 55, you can start withdrawing from the 401k you have there. People leaving jobs as police officers, firefighters, or medics at age 50 or later can do so, too.
  • If you’re extremely and permanently disabled, you may be able to withdraw funds early, without penalty.

Those rules look easier than they actually are and seemingly rules change everyday about 401k plans. Remember 401 k account are for retirement, they are not to be used for emergency funds.

Early 401 (k) withdrawals may be necessary in some cases but you should avoid them until all other options are exhausted