Tag: profits

Microsoft profit slumps a bit

Software King of the World Microsoft slightly missed Wall Street’s average revenue estimate for the latest quarter on Thursday.

The Tame Apple Press has rushed to blame Vole’s sales of its Surface tablets and laptops slump in the face of revamped competition in the personal computer market. The revamped competition being that Apple has something new out which has also proved disappointing.

In fact, Microsoft’s figures were not that bad. Cloud margins improved and the company’s annual commercial cloud revenue run rate reached $15.2 billion, a 50 percent year-on-year improvement. It marks good progress toward its goal of pushing the figure to $20 billion by 2020.

Nadella said Microsoft reached 100 million monthly active users for Office 365 commercial, the firm’s flagship cloud productivity software, the first time Microsoft has given such a figure.

For the fiscal third quarter, ended March 31, overall revenue on an adjusted basis climbed 6 percent to $23.56 billion, but missed analysts’ average estimate of $23.62 billion.

Revenue from Microsoft’s personal computing unit, its largest by revenue, fell 7.4 percent to $8.84 billion. Analysts on average had expected revenue of $9.22 billion, according to research firm FactSet StreetAccount.

The business includes Windows software, Xbox gaming consoles, online search advertising and Surface devices.

Surface revenue plunged 26 percent to $831 million, down from $1.3 billion in the year-ago quarter. And the reason is that Microsoft has yet to refresh its Surface range – which has been on the market now for a while.

Microsoft’s Windows OEM revenue, a measure of the company’s license revenue from computer makers such as Dell and HP, rose five percent. Dell reported strong increases in computer sales driven by high-end laptops.

Revenue from the unit that Microsoft calls “Intelligent Cloud,” which includes server products and the company’s flagship cloud computing platform, Azure, jumped about 11 percent to $6.76 billion in the quarter.

Azure revenue soared 93 percent in the quarter. The service competes with Amazon.com Inc’s Amazon Web Services, the market leader in cloud infrastructure, as well as offerings from Alphabet Inc’s Google, IBM and Oracle Corp.

Microsoft’s commercial cloud gross profit margin reached 51 percent, up from 48 percent the previous quarter. Microsoft has been emphasizing higher-margin premium products such as databases and recently started building its own servers rather than relying on Hewlett Packard Enterprise, driving the cloud margins higher, analysts said.

Microsoft also, for the first time, reported a revenue growth rate for Dynamics 365, its competitor to Salesforce.com Inc’s online sales software. Revenue grew 82 percent in constant currency, though the firm did not give an absolute dollar total.

Microsoft said LinkedIn, which it bought for about $26 billion, contributed $975 million in revenue in the quarter, $25 million more than analysts had expected.

The company’s net income rose to $4.80 billion, or 61 cents per share, in the quarter, from $3.76 billion, or 47 cents per share, a year earlier.

Samsung makes a killing

Samsung had earnings which were stronger than a Sardinian cheese after posting a solid first quarter profit boosted by its memory chip business.

While the first quarter was miserable for Samsung as its boss Jay Y. Lee was swept up in a political corruption scandal, the world’s top maker of memory chips, smartphones and televisions still managed to book a profit that supports expectations for record earnings in 2017.

First quarter operating profit for Asia’s most valuable company by market capitalization was $8.75 billion, matching Samsung’s earlier guidance. Revenue rose two percent.

Samsung Electronics shares were up 2.6 percent at a record high in a flat wider market.

“Looking ahead to the second quarter, the company expects to achieve growth on the back of continued robust memory performance together with improved earnings from the mobile business,” following the global rollout of the new Galaxy S8 smartphone, Samsung said in a statement.

Samsung’s chip business remained the top earner, thanks to price gains for both DRAM and NAND memory chips.

The mobile division reported January-March operating profit of $1.82 billion, down from $3.4 billion year earlier. To be fair, though, Samsung had no new premium product generate meaningful sales in the January-March period.

Pre-orders for the Galaxy S8 launched in April were better than many analysts had expected.

Gates is still coining it in

young-bill-gatesWhile he appears to have dedicated most of his fortune in a war against the mosquito, former software king of the world Sir William Gates III is still the world’s richest man.

According to the Bloomberg Billionaires Index, the net worth of the world’s richest person Bill Gates hit $90 billion. This was thanks to Gates’ gains in public holdings including Canadian National Railway Company and Ecolab.

He is now  $13.5 billion richer than the world’s second-wealthiest person, Spanish retail mogul Amancio Ortega. At $90 billion, the Microsoft Corp. co-founder’s personal net worth is equal to 0.5 percent of US GDP.

Less than two weeks ago, Bill Gates topped Forbes‘ “100 Richest Tech Billionaires in The World 2016” list with an estimated fortune of $78 billion.  It seems that the gods are continuing to smile on Gates, who has dedicated his wealth to saving the world from extinction. Now it seems that the more he gives away the more he gets back from other profitable deals.

It is all a noble cause which almost makes you forgive all those antitrust campaigns in the 1990s.

 

Samsung races ahead on mobiles

SamsungWhile the fruity cargo cult Apple flounders in the mobile area, its rival Samsung is doing rather well.

The outfit is poised to issue guidance for its best quarterly profit in more than two years, propelled by a surge in mobile earnings on the back of robust sales of its flagship Galaxy S7 smartphones.

The South Korean giant will disclose its estimates for second-quarter earnings on Thursday, with analysts predicting a strong mobile division contributed to a 13 percent jump in operating profit from the same period a year earlier.

Analysts are expecting to see a April-June operating profit of $6.8 billion which is the highest profit since January-March of 2014.  Even more oddly it is the mobile division which is making a lot of the cash

This is because Galaxy S7 sales are better than expected in the first half, and the semiconductor business is also outperforming rivals.

Samsung’s smartphone business had been squeezed before the start of this year between Apple  at the high end of the market, and Chinese rivals like Huawei in the budget segment. But the Galaxy S7 has provided a catalyst for the earnings rebound, likely putting the mobile business on track to record its first annual profit growth in three years.  Apple has also slumped in China and failed to come up with a new product for some time.

Some analysts say Samsung shipped around 16 million Galaxy S7s in April-June, with a higher-priced curved-screen version outselling its flat-screen counterpart and boosting margins. Lackluster sales of offerings from rivals such as Apple and LG Electronics also helped reduced marketing expenses, they said.

Samsung’s chip business has not been doing so well. Its quarterly profit sink to its lowest in nearly two years due to weak demand from makers of other smartphones and personal computers.

But signs of some price recovery for DRAM chips starting last month and Samsung’s dominance in the premium solid-state disc drive market with its 3D NAND chip production technology suggest a pickup in coming months, analysts said.

Big Content coins it in

taylor-swift-is-the-apple-of-musicDespite Big Content telling the world+dog that it was nearly bankrupt due to torrenting pirates, it made an absolute fortune last year.

According to new Futuresource figures, last year was the most successful year the music industry has seen in 15 years.

While people didn’t spend nearly as much on music as they did in the heady days of the early 2000s before digital music, piracy and streaming turned the market upside down. But the amount of money spent by music fans is growing. In 2015, industry revenue grew five percent, reaching nearly $19 billion.

Futuresource looked at revenue from sales of CDs, vinyl and other physical media, of subscription services such as Spotify and Apple Music, and of pay-per-download outlets including iTunes.

A lot of the cash appears to be coming from streaming, which Big Content fought tooth and claw claiming that it would lead to more piracy. Streaming hasn’t been fully adopted worldwide. The Germans and Japanese, for example, still spend most of their music budgets on CDs.

Amazon makes a killing

AmazonOnline bookseller Amazon has made a killing and swept away analysts’ estimates and dusted the mantelpiece of doubts about the online retailer’s investment spree.

JP Morgan analysts muttered in a research note that whatever Amazon was doing it appeared to be working.

“While it’s tempting to try to pull out each component of Amazons  strong 1Q and generally recent performance, we think it’s the combination of many factors – the ‘Amazons Flywheel’, Prime, a growing distribution footprint, getting closer to customers, 3P (third party), AWS … the list goes on,” a JP Morgan analyst grumbled.

The “Amazon Flywheel” was Jeff Bezos’ cunning plan of offering the biggest selection of goods at the lowest prices and providing the best customer experience to create a “positive feedback loop” – whatever that is.

Amazon is also known for making bold investments in new business areas even at the expense of profits – a strategy that is often criticised by investors.

“We believe these results are further evidence that Amazon’s investment in infrastructure, logistics, and Web services is accelerating market share gains, cash flow growth and continued high returns on invested capital,” Goldman Sachs analysts wrote in a client note.

Revenue in Amazon’s three main businesses – online retailing in North America, international online retailing, and cloud business Amazon Web Services – swelled 27 percent, 26 percent and 64 percent respectively.

The company also offered a bright outlook, with revenue guidance for the current quarter of $28 billion to $30.5 billion, compared with the $28.33 billion analysts expected.

AWS, launched 10 years ago, delivered more profit in the first quarter than Amazon’s retail business.

While AWS is Amazon’s fastest-growing business, Amazon Prime and Marketplace, where the company acts as a middleman for third-party vendors, are also gaining momentum.

Amazon’s Prime loyalty program offers one-hour delivery, original TV programming and access to digital entertainment products such as Prime Music and Prime Video for an annual $99.

All this means that Amazon is valued at $317 billion, making it the third-largest U.S.-listed company by market value, behind Apple and Alphabet, both of which posted disappointing quarterly results.

Amazon shares, which have gained 40 percent in the past year, trade at 98.7 times forward earnings, indicating that investors see huge potential for more growth. Apple trades at 10.8 times earnings, while Alphabet trades at 19.9 times.

 

Samsung warns of tough year

Gold-Rush-Eating-boots-N_54Samsung has warned that this year is going to be tougher than an old boot and twice as hard to swallow.

In a statement, Samsung said it is expecting a difficult business environment in 2016 due to weak global economic conditions and heightened competition in key businesses including memory chips and smartphones.

Chief Executive Kwon Oh-hyun told employees in a New Year’s address that low global growth will persist this year, with greater uncertainty stemming from issues such as financial risks for emerging countries.

He didn’t talk actual dollars but his comments come amid growing concerns that October-December results for the world’s biggest maker of smartphones and chips may be weaker than previously expected.

On the back of the comments, Korea Investment lowered its estimate for Samsung’s fourth-quarter operating profit to $5.41 billion.

Kwon also warned of greater competition in the firm’s main businesses, Samsung said in its statement, without offering detailed financial forecasts.

The firm is expected to issue official earnings guidance for the October-December period at the end of the week. It already said in late October that operating profit for the quarter will be lower than July-September earnings, citing seasonally weaker demand for its component businesses.

Google makes a fortune

google-logo-art-image-hdGoogle’s profit has beaten forecasts for the first time in the last six quarters, thanks to strong advertising revenue.

According to the company its expenses rose 10 percent to $12.9 billion in the second quarter ended June 30 from the year-ago quarter, and remained at 73 percent of revenue.

But expenses only grew by $91 million from the first quarter, and as a percentage of revenue declined by 1 percentage point.

CFO Ruth Porat told analysts that the decline in quarter-over-quarter operating expenses reflects the outfit’s efforts to keep its expenses under control. We guess that means a lot of executives are having to pay for their own drinks.

Advertising revenue grew 11 percent to $16.02 billion from the year-ago quarter, while the number of ads, or paid clicks, rose 18 percent, the company said.

“Cost per click,” or the average price of online ads, fell 11 percent, but was more than offset by the increase in ad volumes.

This reverses the problem that punters have been accessing pages on mobile devices such as smartphones and tablets, whose ad rates are typically lower.

The company’s consolidated revenue rose 11 percent to $17.73 billion in the quarter.

Net income rose 17 percent to $3.93 billion, or $4.93 for each Class A and B share, from $3.35 billion, or $4.88 per share.

Samsung recovers from slump

galazy-SSamsung has told Wall Street that it expects January-March profit to be its highest in three quarters, beating expectations and suggesting that the tech giant is on track for an earnings recovery.

Samsung’s profit is expected to have reached $5.44 billion in the first quarter, the South Korean manufacturer said.

Investors and analysts expect the Galaxy S6 and S6 edge models  to revive handset sales and propel profits in coming quarters.

Researcher Counterpoint expects Samsung to sell more than 50 million units of the new devices to consumers this year – a new record for the company. The contribution from Samsung’s chip-making division is also tipped to be just as significant as smartphone-related income.

Chips probably sold more than phones for a third straight quarter in January-March, analysts said, as Samsung dominates in memory and grew market share for system chips. Samsung opted to use more of its own chips for its Galaxy S6 models and added chip maker Nvidia as a new contract manufacturing client.

The smartphone business likely also saw sequential shipments growth in the first quarter as new mid-tier handsets such as the Galaxy A and E models went on sale in major markets, analysts said.

For all of 2015, profit is likely to rise 6 percent and sales improving in system chips and favourable pre-sale reviews for the S6 have reversed the estimate from a profit decline forecast earlier this year.

Doom over for PC industry says Intel

Chipzilla is telling the world+dog that the worst is over for the personal computer industry.

Intel forecast third-quarter revenue above Wall Street’s expectations.

Chief Financial Officer Stacy Smith told Reuters that PC sales had stabilised and he expects shrinking demand from consumers in China and other developing countries to rebound, just as it recently has in the United States.

Of course the tame Apple Press claims that it is all to do with how Apple created a mobile revolution with the launch of its keyboardless netbook in 2010. There was talk of a “mobile revolution” which tied with the downturn of the worst PC sales in years.

While many believed that the fall in PCs was because of the increase in mobiles, some of us thought that the two were a parallel development. PC sales fell because of company retrenchment during an economic downturn, while consumer sales went up as punters searched for the latest shiny thing. PC sales have risen as companies are forced to upgrade their dying machines. PCs are cheaper and attempts to bring in BYOD policies for mobile gadgets proved pretty useless.

Intel now expects the market’s recovery to help it grow its full-year revenue about 5 percent, slightly higher than prior expectations.

Chief Executive Officer Brian Krzanich told analysts on a conference call that improved demand from companies replacing old PCs would last at least through the end of 2014.

Intel increased its share buyback program by $20 billion. It wants to buy $4 billion of stock in the current quarter, thinking tht there will be more interest in “two in one” devices with detachable keyboards and screens.

Intel said in a statement it expects third-quarter revenue of $14.4 billion, plus or minus $500 million. Analysts had expected $14 billion on average.

Revenue from Intel’s PC group rose 6 percent in the quarter while its data centre group, a big contributor to gross margins, had revenue jump 19 percent.

Chipzilla’s profits have been made without much interesting in its mobile offerings. Intel said its mobile and communications group’s revenue fell 83 percent to $51 million and had an operating loss of $1.12 billion.

Intel’s second-quarter revenue was $13.8 billion, compared with $12.8 billion in the year-ago quarter.

Chipzilla posted second-quarter net income of $2.8 billion, compared with $2.0 billion at the same time last year.