Google's Gap, IBM's Trap: Tech Winners & Losers

(Updates from 12:00 p.m. ET with closing information.)

NEW YORK ( TheStreet) -- Google ( GOOG) shares extended gains on Friday after the Internet search giant beat Wall Street earnings expectations for the first quarter.

The Mountain View, Calif.-based company reported earnings of $11.58 per share on $13.97 billion in revenue after the closing bell. Analysts polled by Thomson Reuters were expecting $10.66 per share on $14.09 billion in revenue.

Shares were adding 3% to $788.35.

Earnings were aided by an 8% tax rate during the quarter. On the conference call, CFO Patrick Pichette noted this was helped by an R&D tax credit from 2012 that was only retroactively applied in 2013, as well as a mix in earnings.

Wall Street was largely positive on the results, with analysts telling investors the long-term trend is intact. ""The company's core growth remains above industry levels for both online advertising and ecommerce, and with the rollout of Enhanced Campaigns and PLA overseas, and Display continuing to show material traction, we expect to see further improvement to monetization in 2H:13 and 2014," wrote Cantor Fitzgerald analyst Youssef Squali.

IBM ( IBM) shares were plunging 7.1% to $192.46 after the software and services giant missed earnings expectations for the first time in a while.

IBM reported $23.4 billion in revenue, down from $24.7 billion year-over-year, and missing Wall Street's forecast of $24.6 billion. On a non-GAAP basis, IBM earned $3 a share, up from $2.78 a share in the prior year's quarter. Analysts surveyed by Thomson Reuters were looking for earnings of $3.05 a share. IBM said earnings were affected by a weaker Japanese yen, which shaved 7 cents per share from earnings.

Concerns about a slowing global economy were brought to light in CEO Ginni Rometty's prepared remarks. "Despite a solid start and good client demand we did not close a number of software and mainframe transactions that have moved into the second quarter," Rometty said in the press release.

IBM reiterated its fiscal 2013 earnings forecast of at least $16.70, excluding items. Analysts surveyed by Thomson Reuters are looking for earnings of $16.77.

Microsoft ( MSFT) shares were rising 3.5% to $29.81 after the company beat estimates, and announced CFO Peter Klein was stepping down from the company.

Microsoft earned 72 cents a share on revenue of $20.5 billion in the quarter, up from earnings of $5.1 billion, or 61 cents a share on sales of $17.4 billion the same time last year. Analysts, on average, were expecting earnings of 68 cents a share, according to Thomson Reuters. Revenue came roughly in line with expectations.

The Redmond, WA.-based Microsoft offered a preliminary fiscal year 2014 operating expense guidance of $31.6 billion to $32.2 billion, up 4% to 6% year-over-year from the midpoint of its fiscal 2013 adjusted guidance.

CFO Peter Klein will be leaving Microsoft at the end of the current fiscal year, after nearly four years in the role and 11 years at the company. Microsoft will name a new CFO from its finance leadership team within the next several weeks.

Dell ( DELL) shares were lower by 3.51% to $13.46 following news private equity firm Blackstone ( BX) was ending its bid for the PC company, citing weaker trends in the PC space than initially thought.

The firm is withdrawing its offer, which valued Dell shares at about $25 billion because of "an unprecedented 14 percent market decline in PC volume in the first quarter of 2013, its steepest drop in history, and inconsistent with management's projections for modest industry growth," according to a letter sent to Dell.

Last week, research firm IDC said global PC shipments fell 13.9% in the first quarter, with much of the blame being assigned to weak reception towards Windows 8.

Closing prices: IBM closed down 8.3% to $190 Friday. GOOG rose 4.4% to $799.87, MSFT rose 3.4% to $29.76 but DELL fell 3.9% to $13.40.

-- Written by Chris Ciaccia in New York

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