Today: Gilead, Electronic Arts (ERTS), LinkedIn and Yelp announce earnings one day after Apple (AAPL), a day ahead of Facebook. Also: Apple declines, Google (GOOG) and Netflix (NFLX) gain as Wall Street watches Fed.
The Lead: Gilead and EA gain after earnings reports, LinkedIn and Yelp fall
Silicon Valley's most-watched quarterly earnings reports land this week, with Apple beating expectations Monday and Facebook following up its stock-boosting previous report on Wednesday. In between, though, several important local tech companies revealed their financial performances Tuesday with varying results.
Gilead Sciences (GILD), which has been trading at all-time high levels this year and was recently boosted by positive reports on a hepatitis C drug that could be a blockbuster, reported strong gains in profits and revenues that could take it to more record stock prices. The Foster City biotech giant earned $788.6 million, or 47 cents a share, on revenues of $2.78 billion, gains of 16.7 percent and 15 percent respectively, and slightly raised its product-sales projection. After closing with a 1.1 percent gain at $69.50, shares gained more than 1 percent to top $70 in late trading; Gilead stock hit an all-time intraday high of $70.40 Monday.
In its first earnings report with new CEO Andrew Wilson at the helm, Electronic Arts announced a loss of $273 million, or 89 cents a share, on revenues of $695 million; after adjusting for the quirks of the video-game business, however, EA said it earned $105 million, or 33 cents a share, on revenues of $1.04 billion. The redwood City company also adjusted its full-year profit guidance, increasing its projection from $1.20 a share to $1.25.
"There's still a lot of uncertainty in the business," Chief Financial Officer Blake Jorgensen told Bloomberg News. "But we've got our heads down and are delivering what we think are fantastic products in the marketplace."
EA dropped 2.8 percent to $24.13 in regular trading Tuesday after announcing its golf game would no longer carry the name of top professional Tiger Woods, but regained those losses and more in after-hours trading, when shares jumped to more than $25.
LinkedIn headed the other way after its earnings report, which once again trumped Wall Street's expectations. Analysts said the issue with the Mountain View professional-networking service's report -- which showed a loss of $3.4 million, or 3 cents a share, on revenues of $393 million -- was the projection for current-quarter revenues of $415 million to $420 million, which lagged analysts' forecasts. The move follows LinkedIn's pattern, though, Macquarie Capital analyst Tom White said.
"These guys have earned a reputation for putting up pretty conservative guidance and exceeding it," he told Bloomberg.
LinkedIn shares declined more than 3 percent in late trading after increasing 1.7 percent to $247.14 in regular trading.
Fellow social-networking company Yelp suffered a larger fall in late trading after announcing a secondary stock offering at the same time as its earnings. The San Francisco online-reviews site lost money in the third quarter when Wall Street analysts expected a profit, posting a net loss of $2.3 million, or 4 cents a share, on revenues of $61.2 million. While profits were a disappointment, Yelp beat forecasts for revenues and raised its full-year revenue projection to $228 million-$229 million.
"We continue to deliver outstanding results, with year over year revenue growth of 68 percent," Chief Financial Officer Rob Krolik said in Tuesday's news release.
Yelp also announced that it would sell $250 million worth of shares, which have gained as much as 500 percent from the $15 price commanded in the company's March 2012 initial public offering. Shares fell nearly 9 percent to less than $63 after closing the regular trading session with a 1.8 percent gain at $68.83.
One other Silicon Valley company suffered even more in late trading following an earnings release: Redwood City-based photo website Shutterfly fell more than 10 percent in late trading after its earnings report included forecasts that did not live up to expectations. After dropping 3.3 percent to $52.26 in regular trading, shares fell to less than $47 in late trading.
SV150 market report: Google and Apple head in different directions
Wall Street gained Tuesday, pushing the Dow Jones industrial average to a new record high, as expectations that the Federal Reserve will continue its bond-buying plan outweighed underwhelming economic data. Silicon Valley stocks enjoyed a smaller increase than the Dow, though, as gains from Google were canceled out by a post-earnings loss for Apple.
Apple declined 2.5 percent to $516.68 after explaining its drop in profit as a product of its decision to offer software for free. Analysts mostly maintained price targets higher than Apple's current share price, though bearish notes also appeared, with ABG Sundal Collier analyst Per Lindberg writing, "Apple no longer deserves a rich multiple for the simple reason that its sales growth is pedestrian, its net income is falling and its reliance on two sensationally popular products — the iPhone and the iPad — is exceedingly high." IDC reported that Samsung shipped more than twice as many smartphones as Apple in the third quarter, but the Cupertino tech giant is looking to spread out in China for a chance to increase its total.
Google gained 2.1 percent to a new all-time closing high of $1,036.24 after announcing updates to Google+ that include new photo- and video-editing tools while Brazil takes out its NSA frustrations on the company. The Wall Street Journal reported that the Mountain View company is getting close to premiering a smartwatch, part of a wave of such devices that analysts aren't sure consumers want. Speaking of waves, Google's connections to two mysterious barges floating on bodies of water on both coasts continued to pique the nation's curiosity.
Facebook shares dipped 1.7 percent to $49.40 after The Wall Street Journal reported that the Menlo Park social network met with struggling smartphone manufacturer BlackBerry last week about a possible acquisition. Netflix gained 4.2 percent to $327.30 despite theater owners' anger at the Los Gatos company's intentions to premier films on its service, and Cisco (CSCO) increased 1.2 percent to $22.83 after announcing an investment in the Internet of Things initiative.
Up: Netflix, SunPower (SPWRA), eBay (EBAY), Yahoo (YHOO), Google, Yelp, Adobe (ADBE), Oracle (ORCL), LinkedIn, Applied Materials, SolarCity, Cisco, Gilead, Tesla, Intuit (INTU), SanDisk, Juniper, Intel
Down: EA, Apple, Zynga, Workday, Facebook, VMware, Hewlett-Packard
The SV150 index of Silicon Valley's largest tech companies: Up 3.71, or 0.26 percent, to 1,404.46
The tech-heavy Nasdaq composite index: Up 12.21, or 0.31 percent, to 3,952.34
The blue chip Dow Jones industrial average: Up 111.42, or 0.72 percent, to 15,680.35
And the widely watched Standard & Poor's 500 index: Up 9.84, or 0.56 percent, to 1,771.95
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.