Citigroup rises, Microsoft falls on earnings surprises
July 18, 2008 by Tisa Silver
Filed under Finance
Citigroup, the last in a series of big investment banks to report earnings this week, posted better than expected earnings. The company reported a $2.5 billion loss due primarily to another $7.2 billion in write-downs.
On the other hand, Microsoft missed earnings expectations by a penny per share, reporting profits of $4.3 billion. This represents a 42 percent over the same quarter last year.
Heading into the afternoon, shares of Citgroup are up over 10 percent, while shares of Microsoft have shed over 7 percent of their value.
It’s understandable to see stocks rise when companies report news that exceeds expectations and fall when news fails to meet expectations. However, I wonder how appropriate these fluctuations are.
Citigroup’s loss was less than predicted but it is still a loss and a heaping one. Microsoft missed earnings expectations by a penny per share but, perhaps investors are missing the big picture: Microsoft is profitable!
Do you think the markets are right on Citigroup and Microsoft?
