Three's A Trend (If Not A Recovery)

Following chipmaker Intel's excellent earnings report earlier this week, two other tech titans on Thursday reported quarterly numbers that exceeded street estimates.

From InternetNews.com's Paul Shread:

Google's earnings of $5.36 a share were 27 cents better than Wall Street analysts expected, while sales after traffic acquisition costs of $4.07 billion were up more than 4% from the year-ago quarter and just ahead of estimates. Despite the strong report, Google shares fell 2.5% in after-hours trading after a 1% gain ahead of the report.

IBM's earnings of $2.32 a share were 30 cents above forecasts, while a 13% sales decline to $23.25 billion put the company about $340 million below revenue estimates. IBM also lifted its full-year earnings forecast, and its shares added 2% on top of a 3% gain during the day.

So why did Google's stock price drop in after-hours trading despite beating the street? Beats me. Stock market writers often ascribe cause-effect that really can't be proved. But if I were to take a stab at it, I'd say investors are concerned that, as this Bloomberg article notes, the search giant's revenues rose only 2.9 percent over last year's second quarter, down from Q1's year-over-year quarterly sales growth of 6.2 percent.

Nonetheless, Google's revenue still is growing in the face of a terrible recession that has gutted online advertising. That, plus the positive earnings reports from Big Blue and Intel, makes it tempting to believe that the worst is behind us. I'm certainly an optimist, but I think Google CEO Eric Schmidt put things in proper perspective during an earnings conference call:

We saw relative stability in our business in the second quarter -- too early for us to tell when the recovery materializes."

What he said.