Morning business news - January 23Wednesday 23 January 2013 11.48
IBM AND GOOGLE'S QUARTERLY RESULTS BOTH BEAT MARKET EXPECTATIONS - IBM and Google had fourth quarter results out overnight. Both sets of figures were ahead of market expectations with higher earnings reported by the technology giants. The share prices of the two companies both increased on the back of the results.
Adam Maguire, of RTE Online, said the trend at IBM in recent years had been towards software and services development and away from manufacturing. That strategy has been paying off, he adds. Google reported significant increases in advertising which drove revenues to over $14.4 billion, with $2.9 billion in profits. "The vast bulk of advertising comes from its own search engine and some from Google ads which appear on other websites. They are seeing a shift to people picking up services by mobile, tablet and phone. Part of that is their own Android system which is designed to get people using more Google services," Adam Maguire said. Motorolla Mobility, which Google bought last year, made a loss of over $350m in the quarter. "The main reason for buying Mobility was to get a hold of the huge bulk of patents they have in the mobile market but also to get in on the hardware side where Apple have the advantage. They haven't managed to turn that ship around just yet but it's early days," Adam Maguire noted.
Meanwhile, Apple have fourth quarter results out later tonight. This will be the first quarter where the iPad mini will be factored into sales. "It will be interesting to see if that will increase the number of iPads sold or if it will it just eat into regular iPad sales. Another thing to look out for is how iPhone 5 sales have performed over the Christmas period," Adam Maguire said. He added that rumours of a cheaper iPhone could serve to damage the premium brand that Apple has spent years building up.
MORNING BRIEFS - Drinks group Britvic have a trading update today. It said that overall group revenue was up nearly 5% to over £300m sterling. The group's Irish revenue was down 2.8% on the back of a weaker take home soft drinks market. The company also said it was accelerating the distribution of its Fruit Shoot product to over 30 US states over the coming months.
*** Barclays is consulting with staff in its investment bank ahead of a strategic review which is expected to see 2,000 jobs cut. It will follow other investment banks which have cut thousands of jobs in recent times including UBS, Credit Suisse and BNP Paribas. The new CEO, Antony Jenkins, is intent on revamping the bank after the interest rate rigging scandal which cost it almost £300m sterling in fines. The bank is considering recouping some of the fine from its executives bonuses.
*** The US House of Representatives is expected to vote today on raising the US debt ceiling for another four months - until May 18th to be exact. The legislation does not set a specific limit; rather it would automatically increase the limit by the amount required to fund US government obligations right through to that date. That would allow the House to focus on the March 1 round of automatic spending cuts without worrying about the Treasury's ability to raise more money over the coming months.