Week's Winners and Losers: Baristas and Cord Cutters Score

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There were plenty of winners and losers this week, with the world's leading search engine failing to live up to expectations on decelerating ad growth and the leading premium java retailer coming through with a pay increase at a time when other establishments are being criticized for their wages. Here's a rundown of the week's best and worst.

Google (GOOG) -- Loser

Is an earnings miss really a surprise if it just keeps happening? Google posted a lower-than-expected profit in Thursday's quarterly report, but this is the fourth consecutive time that the search giant has failed to live up to Wall Street's bottom-line targets.

That isn't a big deal. Google's investing in data centers and new businesses that don't carry the kind of immediate payoffs that it has in paid search.

The only problematic aspect of the report is that paid clicks rose just 17 percent over the prior year. That may seem like a lot, but Google had posted gains of 26 percent and 25 percent during the year's first two quarters.

Starbucks (SBUX) -- Winner

It pays to be a barista. Starbucks announced on Thursday that its employees will receive a pay increase come January. "The company didn't disclose pay rates, which vary according to market; a Starbucks employee recently told The Seattle Times he started at $9.50 an hour. Job-reviews website Glassdoor indicates the average barista wage is $9.32 an hour." At a time when many fast-food chains and retailers are being taken to task for their low wages, Starbucks finds a way to shine.

It's not the only change at Starbucks. It's relaxing many of its conduct and dress codes. It will allow employees to wear nose studs. They also won't have to cover up tattoos, as long as they are not on the face or neck. Baristas who used to be able to have a complimentary drink during a shift can now also have a food item.

The changes are ultimately about attracting and retaining employees, lowering its turnover and training costs.

Netflix (NFLX) -- Loser

If you're known for providing conservative guidance, you'd better not fall short. Three months ago, Netflix was forecasting that it would close out the third quarter with 53.74 million streaming accounts worldwide. It wound up having just 53.06 million subscribers on its rolls.

Netflix blamed the shortfall on consumer reaction to its May price increase, but it may be more than that. After all, Netflix also grandfathered in existing members to the original $7.99-a-month rate. If $8.99 was too high to woo new subscribers, wouldn't the grandfathering at least help retention efforts?

Another loser here is BTIG Research, which had upgraded the stock the day before the earnings report.

Cord Cutters -- Winners

Folks kissing their hefty cable and satellite television bills goodbye are starting to get more options for video entertainment. Time Warner's (TWX) HBO and CBS (CBS) announced plans for stand-alone streaming services.

CBS is charging $5.99 a month for its streaming platform that offers access to live and legacy CBS content. HBO didn't offer pricing details, but it's a big deal if folks will be able to watch shows like "Game of Thrones" and "True Detective" next year without needing either a pay-TV subscription or an uncle willing to share his HBO Go password.

Tesla Motors (TSLA) -- Loser

Tesla may have been a market darling a week ago after unveiling bar-raising features for its Model S sedan, but this week it was a different story. The electric car maker was held back after an analyst suggested that the Model X crossover SUV could be delayed until the second half of next year.

It wouldn't be a surprise to see a new car run into some roadblocks before hitting the market, and it could also explain why Tesla held last week's event to update its Model S sedan's options, as a way to buy itself some time.

Another piece of bad news for Tesla came out of Michigan, where plans for it to open a dealership were shot down by legislation that prohibits an automaker from selling directly to consumers. Tesla's been battling this old way of thinking in many states, and sometimes it falls short.

Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of Google (A and C shares), Netflix, Starbucks, and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.
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