Today: eBay (EBAY) and Sandisk announce earnings reports that show continued growth, but only one sees its stock price increase in late trading. Also: Apple (AAPL) tops $500 as Wall Street celebrates debt deal.
The Lead: eBay and Sandisk announce earnings, head opposite ways on Wall Street
Silicon Valley earnings season kicked off Tuesday with Yahoo (YHOO) and Intel (INTC), two traditional tech powerhouses who have struggled to find growth of late. On Wednesday, eBay and Sandisk showed that growth is possible.
San Jose e-commerce giant eBay announced profits of $689 million, or 53 cents a share, on revenues of $3.9 billion, which reflect year-over-year increases of 16 percent and 14 percent, respectively. CEO John Donahue championed the company's mobile advances, reporting that mobile sales volume increased 75 percent as the company surpassed 200 million app downloads.
"We delivered strong third quarter results, with mobile driving a significant portion of our new user growth and continuing to transform how consumers shop and pay around the world," Donahoe said in Wednesday's news release.
The company's PayPal payments service -- which will soon benefit from the $800 million acquisition of Braintree that eBay announce last month -- also continued to grow, adding 5 million users in the quarter for a total of 137 million and increasing revenues 19 percent to $1.6 billion.
Investors weren't immediately satisfied by eBay's report, however: After dropping 0.8 percent to $53.52 in regular trading, shares fell more than 4 percent to near $51 in after-hours trades. Analysts blamed the company's forecast for the all-important holiday quarter: eBay predicted that it would bring in profits of 67 cents to 69 cents a share on revenues of $4.5 billion to $4.6 billion in the current quarter, while analysts expected more.
B. Riley & Co. analyst Scott Tilghman told USA Today that the forecast could just be caution in the face of uncertain economic conditions.
"They don't want to be in the position of being too aggressive. With all the chatter around the shutdown, it is very difficult to gauge consumers' willingness to open their wallets this holiday," he said.
Still, if eBay hits its projections, the company would continue on its track of strong growth: in the fourth quarter of 2012, eBay reported profits of 57 cents a share on revenues of $4 billion.
SanDisk's growth was even more robust, with the Milpitas flash-storage company raking in profits of $277 million, to $1.18 a share, on revenues of $1.63 billion. The company's sales increased 28 percent from the same quarter a year ago and 10 percent from the previous quarter, when SanDisk also surprised analysts with record revenue, and the company's profits were more than triple the $77 million recorded in the third quarter of 2012.
"We delivered outstanding third quarter results driven by our strategy to shift to higher value solutions across our portfolio," CEO Sanjay Mehrotra said in Thursday's news release.
SanDisk stock rose 2 percent in late trading to more than $64 after closing with a 0.4 percent advance at $62.94; the company's 52-week high is $63.97.
Elsewhere in the SV150, San Jose's Xilinx declined on Wall Street after announcing profits $141 million, or 49 cents per share, on revenues of $599 million. Outside of Silicon Valley, IBM's revenues came in more than $1 billion lower than analyst estimates and the New York tech giant's shares tanked.
SV150 market report: Wall Street bounces after debt deal, Apple tops $500
Wall Street reacted warmly Wednesday to a deal on Capitol Hill that seems destined to end the federal government shutdown and avert a default by the United States, with the three major U.S. stock indexes rising more than 1 percent, gains that pushed the Standard & Poor's 500 to a record closing high. Silicon Valley tech stocks joined in the fun, as the SV150 gained 1.2 percent and Apple closed higher than $500 for only the second time since the end of August.
Apple's gains were slight compared with other tech stocks, as the Cupertino company moved just 0.5 percent higher to $501.11 after reports that it has pulled back on production of the iPhone 5C due to lackluster early sales. Canaccord Genuity analyst Mike Walkley said in a note that the move by Apple could be positive, however, as it would indicate that the higher-priced iPhone 5S is outselling the iPhone 5C, which would be a boost to Apple's profit margins and revenues. Apple celebrated approval of its planned "spaceship" campus in Cupertino on Wednesday, one day after the tech giant invited media members to a product launch planned for nest week.
Yahoo and Intel headed in opposite directions after their Tuesday earnings reports: Yahoo declined 0.9 percent to $33.09 despite optimism about Alibaba's growth, and Intel gained 1.3 percent to $23.69 as analysts said the Santa Clara chipmaker's results signaled possible stabilization in the personal-computer industry. Social-networking stocks grew, with Facebook gaining 3.3 percent to $51.13 while opening up public posting to teenagers; LinkedIn increasing 1.5 percent to $238.92 after releasing new mobile products for its enterprise customers; Yelp moving 3.4 percent higher to $70.15 and Zynga gaining 2.2 percent to $3.59.
SolarCity had the largest percentage gain in the SV150 on Wednesday after the company announced that it would price shares in its secondary offering at $46.54, which could push the San Mateo company's total take from the offering to near $400 million. Silicon Valley also enjoyed a strong initial public offering Wednesday: Pleasanton cloud-software company Veeva Systems rose more than 80 percent in its first day on the public markets after raising more than $260 million in its IPO.
Up: SolarCity, Pandora, Juniper, Salesforce, Yelp, Facebook, Gilead, VMware, Hewlett-Packard (HPQ), Zynga, Google (GOOG), Advanced Micro Devices, LinkedIn, SunPower (SPWRA), Intel, Nvidia, Workday, Electronic Arts
The SV150 index of Silicon Valley's largest tech companies: Up 15.57, or 1.16 percent, to 1,360.52
The tech-heavy Nasdaq composite index: Up 45.42, or 1.2 percent, to 3,839.43
The blue chip Dow Jones industrial average: Up 205.82, or 1.36 percent, to 15,373.83
And the widely watched Standard & Poor's 500 index: Up 23.48, or 1.38 percent, to 1,721.54
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.