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- These tech execs stood out as the big winners and losers in a turbulent Q3
These tech execs stood out as the big winners and losers in a turbulent Q3
WINNER: Kelly Bennett, Netflix's chief marketing officer
LOSER: Luca Maestri, Apple's chief financial officer
If another company had sold fewer of its products than Wall Street was expecting, the management team might talk about how it would increase marketing, cut prices or revamp products to rekindle sales. Not Apple.
After the company sold fewer iPhones than analysts had expected in its fiscal first quarter, CFO Luca Maestri announced on Apple's earnings call that he would solve the problem by no longer releasing unit sales numbers for its smartphone or any other products.
Maestri rationalized the decision by saying that unit sales weren't really "representative" of the the strength of Apple's business. But he didn't offer to replace that information with other data that might be more representative.
The net effect: Apple shareholders will know less about their company. Investors — already unhappy with the disappointing sales numbers and a weaker-than-expected outlook for the fourth quarter — expressed their displeasure that Maestri was curtailing their information by sending Apple's shares even lower than they were before the announcement.
WINNER: Bob Swan, Intel's interim CEO
When Brian Krzanich was forced out suddenly in June as Intel's CEO, the company handed the reins — at least for the time being — to Bob Swan. In his first full quarter running the company, Swan, who also serves as the chipmaker's chief financial officer, showed he could provide a steady hand.
Intel's third quarter revenue and profit both topped Wall Street's expectations, and it offered better-than-expected guidance for the fourth quarter to boot. Investors cheered, sending Intel's stock up 6% after the report. Not bad for an interim CEO.
LOSER: Darren Grasby, AMD's Senior Vice President, Global Computing and Graphics Sales
AMD's stock got crushed after its third quarter earnings report, falling more than 20% in after-hours trading. The reason? Sales of the company's graphics chips fell in the period from the second quarter and came in significantly below analysts' estimates.
With the price of bitcoin and other cryptocurrencies far off their off their highs, the boom in cryptocurrency mining seems to have subsided and with it, the demand for high-powered graphics processors.
That's bad news for Darren Grasby, who now needs to find another way to drum up sales of AMD's Radeon chips.
WINNER: Yamini Rangan, Dropbox's Chief Customer Officer
After starting off as a free consumer cloud storage service, Dropbox is on a mission to attract paying corporate customers. There's a lot of skepticism on Wall Street that it will have much success.
At least for now, Yamini Rangan and her team are holding the critics at bay. While Dropbox's growth in paid customers has been growing slower than some investors have hoped, it's still ticking upward. Thanks to that, the newly-public company posted a top and bottom line for the third quarter that beat analysts' expectations.
LOSER: Evan Spiegel, Snap's CEO
From a purely financial point of view, Snap's third quarter wasn't terrible. Compared with the year-earlier period, its sales were up, its loss was down, and it reduced its cash burn significantly. It even topped Wall Street's expectations.
But the company spooked investors by reporting that its average number of daily active users fell by 2 million from the second quarter, marking the second consecutive quarter of declines, which isn't a good look for what's supposed to be a trendy tech company. After peaking in the first quarter with 191 million daily users, Snap now has 186 million.
The company attributed the declines to the Android version of its Snapchat app and promised that a new and revised app for Android phones would drive new growth. But Snap's Android app has been a longtime thorn in its side, and the company's struggles have been particularly acute since it redesigned its app earlier this year, infuriating many of its fans in the process.
Regardless, you can put the blame at the feet of Evan Spiegel. He reportedly pushed through the redesign on a short time schedule; didn't do a good job of articulating the goals of the effort to the company's design or engineering teams; then decided to launch it even after getting negative feedback from users and employees. Snaps's still paying the price.
WINNER: Jeff Lawson, Twilio CEO
Two years after Twilio held its initial public offering, Jeff Lawson has the company hitting its stride. The cloud-communications company bested analyst expectations in the third quarter on its top and bottom lines, then offered a better-than-expected outlook for the fourth quarter. Investor cheered, sending its stock up 35% following the report.
But Lawson is doing more than posting solid financials. Under his direction, Twilio last quarter acquired Ytica, to help its call-center clients detect when their customers are getting upset. And it recently agreed to acquire SendGrid, one of its top partners. The company also launched a major new product in Twilio Pay and opened its Twilio Flex product to all of its users
LOSER: Larry Page, CEO of Alphabet
Alphabet's stock took it on the chin after the company reported third-quarter revenue that fell shy of analysts' forecasts. But Google's parent company has had bigger problems lately than just that.
The company angered many employees earlier this year when details came to light of its deal to develop artificial intelligence technology for the US military. Then it sparked even greater alarm inside and outside the Googleplex when reports surfaced this past quarter that it was far along in an effort to develop a censored searched engine that would allow it to resume business in China.
The company also faces growing regulatory scrutiny. It drew the ire of lawmakers in September when top officials decided to skip a US Senate hearing looking into foreign attempts to influence American elections. And it got hit with a massive $5 billion fine by the European Commission in July for violating competition laws.
On top of that, a story in The New York Times about how the company had handled sexual harassment allegations against high-ranking employees sparked widespread outrage and lead to a worldwide walkout last month by workers demanding changes.
Throughout all the controversies, Page, nominally the guy in charge, was nowhere to be seen, at least publicly. Indeed, Page hasn't made a public appearance in years, even as scrutiny of and public pressure on his company has grown more and more intense.
WINNER: Sheryl Sanderg, Facebook's chief operating officer
This is a case of low expectations. Facebook has been taking a beating for much of the year amid a series of scandals and fiascos, most notably the leaking of personal data on some 87 million users to Cambridge Analytica.
There have been signs that all the bad press has been weighing on the company. It missed Wall Street's targets in the second quarter, for example, and its number of daily active users in Europe fell in the period from the first quarter. It also warned that its revenue growth would decline in coming periods.
Investors were bracing themselves for more bad news in the third quarter, including, potentially, a decline in users in the United States and Canada. Instead, the company beat Wall Street profit estimate handily and reported that its number of daily users in the US and Canada remained the same as in the previous two quarters.
For now, Sandberg is showing that she and her team can help Facebook weather the storm.
LOSER: Scott Rosenberg, Roku's platform business' senior vice president and general manager
Roku has been a high flier since its initial public offering last year, thanks in large part to its platform business. Although the company is generally known for its digital streaming boxes that allow consumers to tune in Netflix and thousands of other online video channels, Roku now sees more revenue from selling ads and licensing its software. That business has been growing rapidly, more than doubling on a year-over-year basis in recent quarters.
But in the third quarter, Roku's platform business slowed markedly. It still grew 76% from the same period a year earlier, but that was the slowest growth it had posted in at least five quarters. And the $100 million in platform sales Roku posted for the third quarter was lower than what some analysts were expecting.
Even though Roku's overall results topped analysts' expectations, Wall Street reacted to the report by selling the stock. Roku's shares fell as much as 13% following its announcement. All of which puts Rosenberg on the hot seat for the fourth quarter.
TOSS-UP: Holly Sullivan and Mike Grella, economic development team for Amazon's Public Policy division
Amazon stirred up excitement last year when it announced plans to build a second headquarters, outside its Seattle home, somewhere in North America. The company triggered a coast-to-coast bidding war as cities dangled generous tax breaks and other incentives to woo Amazon and the 50,000 jobs and $5 billion in investments it promised.
As the world learned on Tuesday, they need not have bothered. Amazon ultimately decided to split its so-called HQ2 in two, dividing operations, investment, and jobs between Long Island City in Queens, New York, and Arlington, Virginia. Instead of a full-blown second headquarters, the company essentially decided to expand its existing offices in New York and Virginia.
Credit Amazon, and Holly Sullivan — who led the process — for extracting maximum financial benefits from the cities and getting an incredible deal for the company.
But Amazon may suffer a serious downside in reputational damage as backlash grows against what now looks to many to have been a sham of a process — and a rapacious one, for a company with as much money as Amazon.
Adding to the damage, Amazon's Mike Grella took to Twitter to lambaste people who supposedly leaked information about the site selection. In the process, he highlighted the fact that much of the bidding for HQ2 was done behind closed doors, without input from the public or, in some cases, local elected officials.
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