Some Recent Earnings Performances: Apple, Starbucks & Boeing Plus Microsoft On Yahoo Acquisition

Yesterday's Wall Street Journal contained articles on a host of interesting companies about which I have recently written. Nearby is a Yahoo-sourced two-year price chart of the various firms I'll mention in this post- Apple, Boeing, Starbucks and Microsoft- and the S&P500 Index.

For example, Apple, a company in which we currently hold long-dated call options, rose nicely following its earnings announcement.

Despite the many protestations of pundits as notable as Herb Greenberg that Apple and Steve Jobs just could not continue to surprise, they did. Even when analysts factored in Apple's expectations management, the firm still outperformed them.

This is one reason that our equity selection process is so strong- it ignores those observers and analysts who fail to appreciate actual historical performance of individual companies, opting instead to predict to the mean of all companies' typical performances.

Then we have Starbucks, whose sales have been affected by related economic softness. By going downmarket in the past few years, as I've written in prior posts, the firm exposed itself to the more price-elastic buying behaviors of less-wealthy customers. We're now seeing the results of that strategy.

Whereas financial firms purchase excess growth through asset risk, consumer goods companies like Starbucks purchase it through penetration of non-traditional segments whose buying behaviors are different than those of its core customer group.

So far, Howard Schultz' return to the coffee giant isn't going so well.

Boeing reported earnings on Wednesday, too, also announcing earnings above expectations. Consequently, its stock rose on the news by some 4.5%.

Does this mean Jim McNerney has finally straightened out problems at the airplane maker? Not by a long shot. Boeing is still counting on reversing the Air Force's decision to use Airbus planes to replace its fuel tankers, and the Dreamliner may yet suffer another setback.

Whereas Apple has gone from strength to strength for several years, as evidenced by the price chart above, Boeing has been struggling. I'd have to see a much longer period of sustained revenue growth and total return superiority before I'd believe that Boeing has solved its problems.

Then we have Microsoft. For a change, the Journal's article about the tech giant's CEO, Steve Ballmer, actually reflected well on him. Having its Yahoo acquisition offer outstanding for nearly three months, the software vendor, as represented by Ballmer, is expressing confidence that they can, if necessary, skip the Yahoo deal.

That's actually heartening to me. Not that I'm a Microsoft shareholder. It hasn't been in my equity portfolio for nearly a decade.

But Ballmer made some sense in that he has acknowledged his own firm's risk in integrating Yahoo. Citing internal reasons for not increasing Microsoft's bid for Yahoo, the CEO gave shareholders some reason for sanity in the looming hostile phase of the firm's quest for the ailing internet portal player.

As miserably as Microsoft has performed for years, it will probably only do worse as it attempts to do several new things: integrate a large acquisition, deal with various staffing exits and other related issues, and then have to actually make good on the promise that the Yahoo acquisition will somehow solve all of the firm's ills.

So, on balance, it's been a promising week for some large US companies. Not necessarily sufficient for me to invest in those I don't already own, but at least some signs of better management and perspectives among CEOs of Boeing and Microsoft.