April 19, 2013 - Motley Fool Money Roundtable Discussion | Summary and Q&A

TL;DR

Earnings reports from big tech companies like Microsoft and Google show strong performance, while Intel's profit drops. Coca-Cola and Pepsi hit new all-time highs, and Johnson & Johnson's profits surpass expectations. Dish Network and SoftBank engage in a bidding war for Sprint. SeaWorld goes public with a successful IPO. Underrated sea creatures like the blobfish and sea cucumber are discussed.

Key Insights

• 😫 Microsoft's strong performance in the Enterprise unit, as well as growth in other divisions, contributed to its record-setting quarter.
• 🫠 Google's mobile ad business is showing signs of improvement, with the rate of price decreases moderating and the potential for future increases.
• 🚗 Intel's struggle with mobile and declining PC sales highlights the need for a new CEO who can focus on mobile strategy.
• 🫱 The bidding war between Dish Network and SoftBank for Sprint showcases the potential for consolidation in the telecom industry.
• 💪 Coca-Cola and Pepsi's strong international growth offsets declining soda sales in the US, highlighting the importance of diversification.
• 😑 Intuitive Surgical's profitability remains strong despite ongoing negative press and FDA investigation.
• 📈 Johnson & Johnson's success is attributed to its removal of harmful substances from products and demographic trends.

Transcript

welcome to mle fool money thanks for being here I'm your host Chris Hill joining me in studio this week from mle fool income investor James earlyy and from million-dollar portfolio Charlie Travers and Ron gross good to see you guys how Chris it is earnings paloa we've got the latest results from Google McDonald's Intel and more we've got Coke and P... Read More

Questions & Answers

Q: How did Microsoft manage to have a record-setting quarter despite the decline in PC sales?

Microsoft's strong performance in the Enterprise unit, particularly in commercial sales of Windows, offset the weak retail sales through third-party retailers.

Q: What were the key factors contributing to Google's first quarter profitability?

While prices for ads over mobile decreased, the decrease seems to be moderating, indicating potential future increases, which will lead to improved profitability for Google.

Q: Why did Intel's profit drop in the first quarter and what are their expectations for the second half of the year?

Intel struggled with mobile, a continued challenge for the company. However, they are not changing their guidance, suggesting they expect a stronger performance in the second half of the year.

Q: What are the reasons behind McDonald's global sales drop in the first quarter?

Possible reasons include changing consumer preferences, with more consumers opting for healthier food options like Chipotle, and increased competition in the fast food industry.

Q: Is there concern about the ongoing FDA investigation affecting Intuitive Surgical's stock performance?

The negative press and FDA investigation are indeed a red flag for the company, as investors typically react unfavorably to such probes. However, the impact on the company's overall performance will depend on the outcome of the investigation.

Q: What are the potential implications of Dish Network's bid to buy Sprint?

Dish Network's interest in acquiring Sprint stems from its desire to bundle packages with phone, internet, and TV services. This move could have significant long-term benefits if successful, but a bidding war with SoftBank adds uncertainty to the situation.

Q: Why did Coca-Cola and Pepsi hit new all-time highs despite declining soda sales in the US?

Both companies are experiencing strong international growth, particularly in emerging markets like Brazil, Russia, and India, which offset the decline in sales within the US.

Q: How did Johnson & Johnson manage to exceed expectations in the first quarter?

Johnson & Johnson learned from past mistakes and removed harmful substances from their products, leading to improved sales. Additionally, the company benefited from demographic trends, such as the aging Baby Boomer population.

Summary & Key Takeaways

• Microsoft's third quarter earnings exceeded expectations, with revenue of $205 billion, thanks to strong sales of Windows in the Enterprise unit.

• Google's first quarter profits were just below $4 billion, with indications of lower price decreases in the future, benefiting the company's bottom line.

• Intel's first quarter profit dropped to $2 billion, but the company is not changing its guidance, suggesting a strong second half of the year.

• Chipotle's first quarter profits increased by 22%, although same store sales growth slowed down.

• McDonald's global sales dropped in the first quarter, possibly due to changing consumer preferences and increased competition in the fast food industry.

• Johnson & Johnson's first quarter profits exceeded expectations, driven by strong sales in its consumer division.

• Dish Network made an offer to buy Sprint for $25.5 billion, resulting in a bidding war with SoftBank's existing offer.

• Coca-Cola and Pepsi hit new all-time highs due to strong international growth, although soda sales in the US are declining.

• Intuitive Surgical's first quarter profits increased by 32%, despite negative press and an ongoing FDA investigation.

• SeaWorld Entertainment went public with a successful IPO, leading to a surge in its share price.