Tag: profits

Microsoft does strikingly well

Software Imperium Microsoft has been doing rather well for itself over the last few months.

The outfit, which has been written off by the mainstream press because it was not Apple, earned $5.41 billion in net income on revenue of $16.2 billion.

Sales were up 25 percent from a year earlier, although the prior year results included the effects of a deferral of revenue ahead of the release of Windows 7. Without that, sales were up 13 percent and net income rose 16 percent.

CFO Peter Klein said in a statement that it was an exceptional quarter combining solid enterprise growth and continue strong consumer demand for Office 2010, Windows 7 and Xbox 360,

Chief Operating Officer Kevin Turner added that the company was seeing strong sales of long-term enterprise agreements with business customers.

Shareholders however were not that enthusiastic. Even on the back of good news the Imperium’s shares only rose by one percent. If Apple had made the same announcement, share prices would have eclipsed the sun.

Microsoft earned $4.3 billion from its Windows and Windows Live division, on revenue of $4.79 billion, as PC sales grew by an estimated 9 percent to 11 percent from a year ago.

Thanks to the release of Office 2010, the Microsoft Business division posted $3.39 billion in earnings on sales of $5.13 billion. Overall revenue was up 14 percent, although consumer sales grew at more twice the rate of business spending.

The Server and Tools unit posted a $1.63 billion operating profit on revenue of $3.96 billion. The Imperium saw double digit growth in both multi-year agreement and one-time sales as well as a pick-up in the mix of premium versions of Windows Server. Subscriptions of its still new Windows Azure grew 40 percent quarter-over-quarter.

However the Imperium failed to make a profit on its online advertising. Although doing better than last time, lost $560 million in the quarter, on revenue of $527 million.

The Entertainment and Devices unit, which is all things Xboxish, posted a $382 million operating profit on sales of $1.79 billion. Xbox console sales grew 38 percent as the company introduced a new, slimmer version of the game hardware.

Microsoft said that while it has seen a shift from low-end PCs to higher-end models, it had not seen a significant impact from tablets such as Apple’s iPads. 

AUO, Fujitsu, STMicro and SAP post Q3 earnings

AU Optronics (AUO), which is  Taiwan’s second largest maker of liquid-crystal displays, has posted poor earnings for Q3.

The company announced a 97 percent plunge in its third-quarter profit, citing the fall of panel prices as the main problem. Net income dropped to $7.4 million (NT$227 million) in the three months ending in September, from $227 million (NT$7.42 billion) a year earlier.

For the third quarter, AUO said its large-sized panels exceeded 28.67 million units, down 3.2 percent quarter-over-quarter but up 7.4 percent year-over-year. It said shipments of small- and medium-sized panels reached around 55.59 million units, up 0.3 percent quarter-over-quarter but down 14.2 percent year-over-year.

For the first nine months of 2010, AUO’s large-sized panels totalled around 85.52 million units and small- and medium-sized panels topped 168 million units.

Andy Yang, chief financial officer of AUO said in a statement: “In the third quarter, the panel industry witnessed inventory adjustments by customers and lower-than-expected prices,”
 
Yang tried to reassure investors, saying: “Looking into the fourth quarter, AUO will continuously adjust its capacity utilisation rates based on market demands. We hope to continuously provide high value-added products and innovative R&D and technology.”

According to Digitimes AUO is planning to invest in a 7.5G TFT-LCD panel plant in China. The predicted overall investment amount from Taiwan to China will exceed $10 billion in 2010. However, it will need approval from the Investment Commission of Taiwan’s Ministry of Economic Affairs (MOEA) which may not happen by the year’s end.

The Investment Commission has announced total investment of US$8.65 billion from Taiwan to China for January-September 2010. A spokesperson for the Investment Commission said that all reviews are case-by-case. The investment amount announced by the Investment Commission only includes investments approved by the commission and it declined to comment on ongoing reviews.

The spokesperson denied that the MOEA has been told to control the total investment amount under $10 billion and it will not purposely delay the review of AUO’s project in order to avoid excessive concentration of investments in 2010.

Results were bleak for Fujitsu which also posted loses. Net profit for the July-September period fell 76 percent year on year, although its operating profit grew.

The Japanese technology giant recorded a group net profit of  $213 million (17.45 billion yen) for the fiscal second quarter, down 76 percent from last year’s $885 (45 billion yen)

Operating profit rose 96 percent to $454 million (37.16 billion yen) from $231million (18.92 billion yen) in the same period a year before, while revenue fell 3.7 percent to $13.45 billion  (1.100 trillion yen) from $13.96 billion (1.142 trillion yen.)

Meanwhile chipmaker STMicroelectronics had some success. Third quarter net revenues increased 16.8 percent on a year-over-year basis, with all regions and all market segments, excluding telecoms, posting revenue growth.

Regional growth was led by Greater China-South Asia with sales growth of 29 percent, followed by the Americas with a 27 percent increase. Net revenues growth of five percent were down to Greater China-South Asia and Japan-Korea with nine percent and sevent percent growth, respectively.

Its IMS and ACCI products grew revenues by 43 percent and by 29 percent, respectively. However its wireless sector decreased by 23 percent.

President and CEO Carlo Bozotti said in a statement: “Our third quarter financial performance reflected high demand for our products and the effective operating leverage of our model. ST reported both revenues and gross margin above the mid-point of our guidance range.

“These results underscore the quality of our product portfolio and validate our roadmap to enhance our return on invested capital. Our two largest product sectors, ACCI and IMS, both achieved record levels of sales in the quarter, with IMS surpassing one billion dollars in quarterly sales for the first time.”

Software company SAP enjoyed positive results with both revenue and profit rising in the July to September quarter.
    
Profits after tax were up 12 percent on the same period a year earlier at $694 million (€501 million)  and revenue also rose by 20 percent to $4.1 billion (€3 billion). Software and software-related service revenue was $3.17 (€2.3 billion) in the quarter, up 20 percent from the same quarter last year. Software revenue was up 25 percent at $906 (€656 million)

Lexmark CEO retires after posting Q3 earnings, shares plummet

Lexmark’s CEO, Paul J. Curlander, has announced that he will retire, after the company posted lower-than-expected third quarter earnings, sparking dismal performance on the stock market, where shares fell nearly 20 percent.

Lexmark, which specialises in printing and imaging products for consumers and businesses, posted its third quarter results today, which appeared positive at face value. 

Revenue was up from $958 million last year to $1.02 billion. Net earnings for the third quarter were $72 million, up a massive 622 percent compared to the same period last year. Net cash from operations in the third quarter were $130 million, with a year-to-date figure of $367 million, all of which is good news for the company.

However, that was still lower than market experts expected. Analysts for Thomson Reuters forecasted revenue of $1.04 billion, $20 million more than Lexmark reported, and a share value of between $0.98 and $1.09, compared to the $0.90 supplied by its third quarter figures.

The slightly lower revenue is not a huge drop, and the sheer increase in net earnings for the third quarter shows that Lexmark is doing well in general, but the lower-than-expect figures, coupled with the retirement of Curlander, was enough to send the company’s shares spiralling downwards to $38.54 per share at the time of writing, a massive drop of $9.18 or 19.24 percent, which simply cannot help its fourth quarter earnings.

Curlander, 57, is to retire in the Spring of 2011 after 12 years as CEO of the company. Paul Rooke, the current Executive Vice President, set to take his place, as both CEO and Director. Curlander will continue on as chairman of the Board of Directors and will help facilitate the transition of power to Rooke until early next year.

ARM enjoys strong revenues on back of smartphones, iPad

The tremendous growth of smartphones and the success of Apple’s iPad have helped further boost ARM’s earnings.

In its quarterly financial announcement, its pre-tax profits had risen by 60 percent to $61million (£38.8) compared to $38.5m (£24.3m) in the same period in 2009. Revenue was $159.4 (£100.4m), up from $119 (£75.2m.)

CEO Warren East said in a statement: “Q3 was a good quarter for ARM. Not only are we benefiting from growth in applications where we are the established market leader, including in smartphones and mobile computers, but we are gaining share in markets like digital TV and microcontrollers.  

“Our partners are also starting to develop chips in new markets for ARM, such as servers and laptops, creating longer-term opportunities.  In addition, both physical IP and Mali graphics performed well with important license wins and increasing royalty revenues.

“Given the broadening growth opportunities that are available to us, we have accelerated investment in R&D in the first nine months of the year whilst also increasing both profits and cash generation.”

Licence revenues grew in the period by 33 per cent to $53m, accounting for one-third of group turnover. Royalty sales grew by 31 per cent to $83m, accounting for just over half of group turnover, the company said.  Over the year it said 900 million ARM processor based chips were shipped in mobile devices with four processor licenses signed for mobile phone and computing applications.

It also cited an increased share in target markets such as consumer electronics and embedded products with 600 million ARM-processor based chips shipped in everything from toys to televisions, cameras to cars.

In terms of licensing, 18 processor licenses were signed for a broad range of applications including advanced processors for use in markets such as network infrastructure and sensors.
 
ARM reckons it “remains well positioned for growth with leading semiconductor companies increasingly adopting ARM technology for a broadening range of end-markets.” With even Intel recommending ARM-powered Apple gear it’s hard to disagree.

AMD contracts to give TSMC's profits a boost

TSMC may see its sales for this quarter grow as a result of contracts with AMD to make its   40nm Northern Island and Ontario chips.

According to the Taiwan Economic News, AMD is expected to announce its Northern Island graphic chip next week, and begin to ship Ontario chips designed for its Fusion processor by the end of this year.

Sources close to the island tell TechEye that the Llano Fusion processor, which is being built by TSMC is now sampling widely, while GlobalFoundries (GloFo) is on target to ship them in volume during the first half of 2011.

Ontario chips are very much the low end of AMD’s SKUs – the Llano will use 32 nanometre High-K Metal Gate technology.  Llano chips are being built by GloFo at the company’s fab in Dresden – formally owned by AMD. GloFo claims it is the only foundry to make high performance integrated semiconductors using HKMG, using Gate First transistors.

TSMC has signed the contracts for making two chips, which will soften the effect of market slowdown on the company`s sales for this quarter.

Dirk Meyer, president and chief exec of AMD said recently that computer sales in Western Europe and North America weren’t as buoyant as he’d have liked, last quarter.  Last quarter AMD had sales of US$1.62 billion as opposed to the US$1.65 billion in Q2.

Three more Yahoo execs jump ship

Three more Yahoo execs are jumping ship.

According to a report by Kara Swisher of All Things Digital, the company is in for another major round of executive losses, which includes the North American VP Hilary Schneider, US Audience head David Ko, and VP of Media Jimmy Pitaro.

It’s not clear why they are leaving and when we contacted Yahoo it wouldn’t give us any information.

Since September 2008 Yahoo has dropped from nine percent of the search market share to just over 6.3 percent; in the same time Google jumped from 80.3 percent to 84.7 percent.  It’s clear that the lower the market share the lower the profits and the higher the pressure on the big wigs.

And once this started, Yahoo executives, including Chairman Terry Semel, CEO (and co-founder) Jerry Yang, and others began to leave.

According to All things Digital, Yahoo is trying to make the latest departures look an ouster. However, it claims that the reality is that CEO Carol Bartz was begging the departing executives to stay.  

The report also hinted that Bartz was the reason for the departures: ” Yahoo CEO Carol Bartz’s penchant for shooting her mouth off saying colourful things is coming back to bite her,” it said.

“In recent weeks, Carol has: Annoyed Apple by saying company’s control- freakness will doom its efforts in the ad business, annoyed Alibaba’s CEO Jack Ma with some public remarks about Yahoo’s Alibaba stake and alarmed execs at search-partner Microsoft, one of whom tells Kara Swisher that “It is becoming a little unsettling.”

Another part of the reason for the departure stems from issues with the company’s partnership with Microsoft.  The company brought in former Microsoft Executive Blake Irving as its Vice President and Chief Products Officer, and Mr. Irving in turn brought in many former Microsoft engineers – a move that clashed with existing execs.

In an emergency board meeting this week, the board reportedly discussed installing a second in command to Carol Bartz, which might take over from her when her 18 month current contract expires.  

AMD posts third quarter profit warning

AMD’s third quarter revenue will be lower than expected, the chip giant and Spintel rival has warned.

Demand for notebooks in North America and Europe hasn’t been as high as it hoped. It thought that third quarter revenue would enjoy seasonal growth but has piped up to say that a decline, rather than growth, is expected – of between one and four percent. 

iPad friendly and News International owned Wall Street Journal reports that the trouble could be down to AMD’s dismissal of slate and tablet computing. Earlier this month, VP at AMD Leslie Sobon said that there are no immediate plans to target the growing tablet market, though she did say that with its Ontario chip on the cards it will be in a good position to capitalise on it  if it needs to.

Sobon was quoted as saying: “We will move to tablets when they are proven successful.” The general feeling is that British ARM currently has the stranglehold on the mobile and tablet chip segment.

As usual, the gospel being preached is that it’s consumer buying habits rather than its own shortfalls that are behind the profit warning. Economic uncertainty means people are still shaky about buying new technology.

While the quarter may have investors and stock holders feeling apprehensive we’ll reserve judgement until the battle between the next-gen AMD chips and Intel’s Sandy Bridge kicks off. We’ve heard from industry sources close to AMD that it is “in the crapper” with a wide range of its products, though the core CPU side of things is looking promising for 2011. 

As far as notebook demand goes – we’ve heard that demand will be high for its latest and greatest at the start of next year. But capacity problems mean that while geeks will want to get their hands on the latest AMD kit, shortages at TSMC and Global Foundries mean that there may not be enough to go around.

Following AMD’s announcement it saw after-hours stocks at the NYSE rising from $6.40 to $6.45. 

Intel adjusted its profits earlier this year though it still expects growth. 

Dell's Q2 net profits rise

Despite the revolt against Michael Dell, it seems he may be doing something right. Dell has announced that its overall company revenue has grown from 22 percent to $15.5 billion. 

In its Q2 financial report the company also announced its commercial business revenue had increased by 28 percent to $12.7 billion and its server, storage and services revenue was by up 43 percent to $4.3 billion. The company also announced an 11 percent gain in operating income to $745 million on a GAAP basis in year-over-year comparisons.

It said its commercial business continued to benefit from improved demand across all products and services, and in all geographies, as Dell expands on its enterprise portfolio.

Recently, Dell acquired Scalent, developer of virtual infrastructure management technology, and Ocarina Networks, a leading developer of storage optimisation technology. The company also announced an agreement to acquire 3PAR, a provider of utility storage for cloud computing. These acquisitions, Dell says, demonstrate its “commitment to build its capabilities for open and affordable enterprise.”

Dell’s business in emerging countries is also continuing to grow. Total revenue from Brazil, Russia, India and China (BRIC) were up 52 percent to account for 12 percent of Dell’s overall revenue.

GAAP operating income was $745 million, or 4.8 percent of revenue. Non-GAAP operating income was $872 million, or 5.6 percent of revenue. Cash flow from operations was $1.3 billion, with Dell ending the quarter with $13.1 billion in cash and investments.

Server and networking revenues have increased 35 percent with the rapid growth in blades. Storage revenue improved 13 percent led by EqualLogic storage products, which grew by 63 percent and services revenue increased 57 percent to $1.9 billion with the inclusion of Perot Systems.
   
However, one place Dell failed to make a difference was in the consumer market where revenue was flat at $2.9 billion. Operating income was at a $21 million loss.

Michael Dell waffled, from his mutinous ship: “We continue to strengthen our portfolio of data centre solutions at an aggressive pace with the addition of key IP, talent and technology. This quarter’s results are a strong reflection of the progress we’ve made, and we remain very focused on delivering the best possible solutions and services to meet our customers’ IT needs.”

Lenovo's profits grow

Lenovo has unveiled a third straight quarterly profit.

It posted a net profit of $54.86 million for the April-to-June first financial quarter, against the $16 million loss it made a year ago. Its sales also rose by almost 50 percent to $5.15 billion, up from $3.44 billion last year.

During its first fiscal quarter Lenovo said its worldwide PC shipments increased 48.1 percent year-over-year, compared to the industry’s growth rate of approximately 20.9 percent worldwide for the same period.

It claims its quarterly figures show it is the fastest growing of the top five PC manufacturers. During the first quarter, Lenovo achieved for the first-time ever, double-digit market share worldwide, and recorded its lowest-ever quarterly expense-to-revenue ratio. It added that its  gross profit for the quarter increased 38.6 percent year-over-year to US$523 million and it had been helped by a rebound in global demand, which had helped it achieve “a historic high market share of 10.2 percent”.

Lenovo China grew its consolidated sales in the first fiscal quarter by 50 percent year-over-year to US$2.5 billion, accounting for 48.7 percent of the Company’s worldwide sales.

During the quarter, Lenovo further strengthened its number-one position in China to an industry-leading market share in China of 28.7 percent. Lenovo’s PC shipments in China increased 42.8 percent year-over-year in the quarter, exceeding the overall industry increase of PC shipments in China of 30.9 percent.  In Emerging Markets Lenovo’s consolidated sales doubled from that of a year ago, totalling US$821 million for the first fiscal quarter, or 16 percent of the Company’s worldwide sales.

Lenovo’s purchase of IBM’s personal computer business in 2005 also seemed to have a hand with the profits with the company claiming: “During the [quarter], the worldwide PC market continued to extend the strong growth momentum started in the second half of last fiscal year to grow at 20.9 percent year-on-year.”

Lenovo’s Laptop computers generated 60.5 percent of the Company’s total sales revenue worldwide in the first fiscal quarter. Consolidated sales for Lenovo’s laptop PC business worldwide in the first quarter increased 50 percent year-over-year, helping Lenovo move from sixth to fourth place among the world’s leading laptop vendors.

The company’s laptop shipments worldwide in the quarter were up 58 percent, compared to an overall industry increase of 28 percent year over year.

Sony Ericsson shows record Q2 growth

Sony Ericsson has shown record growth, having today released its earnings for the second quarter of this year.

Sales were up 25 percent from the previous quarter, from €1,405 million to €1,757 million. This was also a four percent increase in sales compared to the same time last year, when earnings of €1,684 million were posted.

Despite this, the actual number of units shipped has dropped since last year, due to a reduced product portfolio. 11 million units shipped, down 20 percent from 13.8 million units in the second quarter of 2009. There was slight growth compared to the first quarter of this year, however, up five percent from 10.5 million units.

Given the reduced shipments much of Sony Ericsson’s earnings came from higher priced handsets. The average selling price increased 19 percent compared to the previous quarter, up from €134 to €160. This was also a 31 percent increase on the same time last year, where the average selling price was only €122.

Sony Ericsson has been tightening its belt during the recession, with its “transformation programme”, which began in 2008, entering its final stages now. It plans to cut expenses by €880 million by the year’s end and has cut 4,000 jobs since the programme began. The restructuring has cost the company €374 million since it began.

The cuts have paid off, as Sony Ericsson now has a net cash position of €609 million, up €46 million from the previous quarter. Market share was level at around four percent.

“Our second quarter results show that the company continued the momentum seen in the first quarter as a result of our focus on the value market and the success of new smartphones; Xperia X10 and Vivaz, launched during the first quarter,” said Bert Nordberg, President of Sony Ericsson. “These models, along with the Xperia X10 mini and Xperia X10 mini pro which started shipping at the end of the second quarter, have been well received by operators and we are now well positioned for long term growth.”