American Express, Baidu Rise; Microsoft Declines

123jump.com Staff
25 Apr, 2008
New York City

Tech stocks fell after a cautious outlook from Microsoft. Microsoft earnings declined 11% to $4.39 billion on nearly flat revenue of $14.45 billion. Weak guidance for the current quarter dragged the stock lower 6%. However, American Express surged 4% after it reported 11% decline in revenue and earnings. Baidu.com revenue soars 108% from a year ago.

[R]9:45AM New York – U.S. stocks traded mixed at the opening on weak guidance from Microsoft.[/R]

Tech stocks fell at the opening after earnings at Microsoft declined on weak sale in Windows operating systems. Dow and S&P 500 edged higher in the morning trading after American Express reported less than expected earnings and revenue decline.

Microsoft stock fell after it reported third quarter revenue of $14.45 billion declined from $14.40 billion and net income declined from $4.39 billion from $4.93 billion a year ago. Earnings per share declined to 47 cents from 51 cents a year ago.

The results included European Commissions fine of $1.5 billion paid in the quarter.

Entertainment and devices revenue that includes sales of Xbox 360 game console in the quarter grew 68% over the comparable period last year. Cumulative console sales surpassed 19 million during the quarter, up 74% from a year ago. Server and tools revenue rose 18% in the quarter, 23rd quarterly double digit revenue growth in a row.

Microsoft guided second quarter revenue between $15.5 billion and $15.8 billion and diluted earnings per share between 45 cents and 48 cents.

Microsoft increased dividend to 11 cents from 10 cents a year ago.

Microsoft stock ((MSFT)) fell $1.76 to $30.01 at the opening.

American Express stock added after reported first quarter net income declined 11% to $974 million from $1.1 billion a year ago and diluted earnings per share declined 7% to 84 cents from 90 cents a year ago.

Revenue net of interest expenses declined 11% to $7.186 billion from $6.484 billion.

Provisions for losses increased 52% to $881 million, up from $581 million a year ago, reflecting higher write-off and delinquency rates as well as growth in loans outstanding and business volumes.

Revenue in the U.S. card services fell 19% to $523 million from $644 million and revenues in the international card services rose 22% to $1.2 billion and net income gained 30% to $133 million.

American Express stock ((AXP)) increased 4% or $1.84 to $46.72 in the first fifteen minutes of trading.

The Chubb Corporation, the property and casualty insurance company, fell stock after it said net income in the first quarter of 2008 was $664 million or $1.77 per share, compared to $710 million or $1.71 per share in the same quarter of 2007.

Net written premiums for the first quarter increased 2% to $2.9 billion. The first quarter combined loss and expense ratio was 83.9% in 2008, compared to 83.4% in 2007. The impact of catastrophes accounted for 1.8% of the combined ratio in the first quarter of 2008, compared to 2.5% in the first quarter of 2007.

Chubb stock ((CB)) fell 4 cents to $53 at the opening.


Baidu.com, Inc., A Chinese-language internet search provider said total revenues in the first quarter of 2008 increased to RMB574.4 million ($81.9 million), representing a 108.4% increase from the same period in 2007.

First quarter of 2008 net income increased to RMB146.6 million ($20.9 million), representing a 71.5% increase from a year ago.

Diluted earnings per share for the first quarter of 2008 were RMB4.22 or $0.60.

The number of active online marketing customers during the first quarter grew to approximately 161,000, an increase of 3.9% from the previous quarter.

Baidu stock ((BIDU)) rose $16.64 to $357.81 at the opening.