Tag: results

Swedish Ericsson works its way out of borkage

Ericsson will refocus its business for managed services, explore options for its loss-making media arm and take several writedowns.

The move is the first from its new CEO which is supposed to lead the Swedish telecoms equipment maker out of its worst crisis in a decade

Board member Borje Ekholm took over as CEO in January and the markets had been awaiting for his cunning plan to get out of the mess the company is in.

The firm is grappling with shrinking markets and fierce competition from China’s Huawei, Finland’s Nokia and the rise of the Ice Giants trying to cross the Bridge of Bifrost (we made the last one up).

The Swedish company said it would take $797 million-$1.02 billion in the first quarter related to recent negative developments in certain large customer projects.  This has worried some analysts who fear that taking that much cash out of the bank might indicate the company is a bit borked.

The company will also write down assets in the first quarter, with an estimated impact on operating income of $342-$456 million, it said in a statement.

Ekholm said he expected his bottom line to be well and truly massaged and for significant improvements to be seen in 2018.

“Beyond that I am convinced that Ericsson, on a sustainable basis, can at least double the 2016 Group operating margin, excluding restructuring charges,” he said.

Oracle’s increased cloud profits are cool for Catz

Database outfit Oracle reported better than expected quarterly profit and adjusted revenue as the business software maker benefits from its transition to cloud-based products.

Sales of the company’s cloud-computing software and platform service rose nearly 62 percent to $1.19 billion.

However, it was not all plain sailing because its software licensing business fell nearly 16 percent. This is being seen by some analysts that Oracle has managed to move to the cloud to tackle the shrinking licensing business.

Safra Catz, Oracle chief executive, said during the earnings call that growth in revenue from its cloud business has overtaken new software licenses.

She said adjusted revenue from its Software as a Service (SaaS) and Platform as a Service (PaaS) unit rose 86 percent to $1.1 billion on a constant currency basis, which was at the high end of its previous guidance.

Oracle’s net income rose to $2.24 billion in the third quarter ended 28 February, from $2.14 billion last year.

Oracle’s total adjusted revenue rose nearly three percent to $9.27 billion, marginally beating estimates.
The company revenue to grow between negative one percent and positive two percent.

Nvidia coins it in

nvidiaNvidia’s moves to expand into areas outside its traditional gaming computer base appear to be paying off.

The company saw its quarterly revenue surge more than 50 percent for the second straight quarter.

The reason appears to be the use of its GPUs in self-driving systems and artificial intelligence.

The company predicted it would make $1.90 billion, plus or minus 2 percent, for the current quarter. This is a bit higher than the $1.88 billion Wall Street thought.

Revenue in the company’s graphics processing units’ business, which contributes more than three-quarters to its total revenue, rose 57 percent to $1.85 billion in the fourth quarter.

But the good numbers appeared to have come from its cloud services which more than tripled to $296 million in the quarter.

Nvidia Chief Financial Officer Colette Kress said the company’s cloud business was expected to grow like topsy.

Nvidia’s automotive business, which produces the DRIVE PX 2 self-driving system used by Tesla saw a 37.6 percent rise to $128 million.

Analysts had expected revenue of $135.3 million from the business.  Nvidia’s total revenue rose to $2.17 billion from $1.40 billion, beating the average analyst estimate of $2.11 billion.

Apple did not have a record quarter

Apple sauceThe Tame Apple press did a number on analysts and their readers last week when they reported that Apple had produced record results.

Last week the Tame Apple Press reported that Apple had total revenues of $78.4 billion bringing in a profit of $17.9 billion, Apple CEO Tim Cook said he as “thrilled” with the results and Wall Street was happy, too.

However, those who do not want to sacrifice their analyst and journalistic credibility smelt a rat. After all, Apple’s tablet sales were slumping and Apple had not ordered so many of its disappointing iPhone 7s.

Market Watch spotted that for the first time since 2013 Apple had recorded a quarter of 13 weeks.

On a prorated basis, Apple would have needed to report earnings per share of about $3.53, higher than its reported EPS of $3.38 a share, to account for the extra week of business. Revenue should have been $81 billion versus the reported $78.4 billion, which was a miserable three per cent increase anyway.

Basically, most Apple fiscal quarters are 13 weeks long. Occasionally, however, they have a 14-week quarter. Apple’s Q1 2017 was a 14-week quarter, for the first time since Q1 2013. This means that Jobs’ Mob could add in the results of an extra week’s profit.

The only reason it seems as if Apple grew is that there was an extra week added to Q4 2016 results that was not there in Q4 2015. So the company had 7.6 percent more time to add to revenue and EPS, but instead the net result was a weekly run rate contraction of 4.11 percent and 4.76 percent, respectively.

This was also a period in which archival Samsung suffered greatly, and Apple had the chance to reap the rewards. But it didn’t. Total iPhone shipments climbed only five percent in the three months through December as Samsung issued a recall for its flagship Galaxy Note 7. Samsung shipped 77.5 million smartphones in the period, almost the same as Apple which is terrible news for Jobs’ Mob.

Analyst Thomas Kee said that Apple should have been making 10 times what it claimed it was earning and he thinks it is a good idea to get rid of the shares quickly before the market realises.

But that was not the only thing Apple did. A huge settlement benefit  hit the first quarter of FY16, which makes Services look even better – but doesn’t change the overall net – so everything is artificially inflated.

Amazon’s profits down

AmazonOnline bookseller Amazon is predicting an unexpected dip in operating profit for the current quarter, due to concerns about the costs of investments including new warehouses and video content.

The world’s largest online retailer also reported lower-than-expected fourth quarter revenue and missed Wall Street targets for its cloud computing unit.

The Seattle-based company is spending heavily to take greater control of package delivery and to expand its video service around the world. It wants to promote sign-ups for Amazon Prime, its $99-per-year shopping club, which leads to users buying more goods, more often.

Amazon Chief Financial Officer Brian Olsavsky told assorted hacks that he had “stepped-up” spending levels all the way into 2017.

For years, Amazon has posted roller-coaster results as founder and Chief Executive Jeff Bezos emphasizes building up businesses rather than making an immediate profit. He has sunk profits into new areas that have either built new markets – as with cloud services or its Kindle e-readers.

Sometimes it works, other times it doesn’t and some investors are uneasy.

Sales in the first quarter will have a tough comparison to the year prior, Amazon’s Olsavsky said, when foreign exchange rates were more favourable and the 29 February leap day gave shoppers an extra 24 hours to spend.

The just-ended holiday season was Amazon’s best-ever. It was a heavily promotional period for Amazon, said Olsavsky, though he did not comment on how discounts compared with prior years.

Net sales for Amazon rose 22.4 percent to $43.74 billion in the fourth quarter, compared with the average analyst estimate of $44.68 billion.

Amazon is producing television shows for Prime subscribers to watch online. It is developing gadgets with an artificially intelligent assistant, Alexa, so users can buy toilet paper and other goods by voice command. And it is building out a system of trucks, planes and warehouses so orders are sped to Prime members in two days or less, a convenience that few online retailers can afford to match.

The company forecast first-quarter operating income between $250 million and $900 million, below the consensus estimate of $1.34 billion.

Amazon had reported operating income of $1.1 billion for the same period last year.

Amazon Web Services, the company’s fast-growing and lucrative cloud business, posted a 47 percent jump in revenue to $3.54 billion, but fell short of the average analyst estimate of $3.60 billion, according to FactSet StreetAccount. Amazon is the market leader in the space, selling computer services, hosting websites and storing data.

Nokia does better than expected

Gold-Rush-Eating-boots-N_54Former rubber boot maker Nokia has reported a better-than-expected quarterly profit thanks mostly to the fact it bought Alcatel-Lucent and slashed its costs.

Nokia and its rivals, Ericsson and Huawei, are not having a good time as telecom operators’ demand for faster 4G mobile broadband equipment has peaked, and upgrades to next-generation 5G equipment are still years away.

Fourth-quarter group earnings before interest and taxes fell 27 percent from a year ago to $1.01 billion, but about 25 percent better than the cocaine nose jobs of Wall Street predicted.

The networks unit’s sales in the quarter fell 14 percent, more than expected, but its operating margin came in at 14.1 percent, ahead of a market forecast of 11.7 percent.

Nokia said that while networks sales were set to decline further this year, profitability could improve from a 2016 margin of 8.9 percent.

Chief Executive Rajeev Suri said in a statement that he was disappointed with Nokia’s topline development in 2016, he expected its performance to improve in 2017. He saw potential for margin expansion in 2017 and beyond, as market conditions improve and sales transformation programmes gain traction.

Still in the current market, Nokia’s results are strong.  Nokia bought Alcatel-Lucent last year in response to industry changes and is currently axing thousands of jobs as it seeks to cut 1.2 billion euro of annual costs by 2018.

Nokia was caught out by the rise of smartphones and ended up selling its handset business to Microsoft in 2014, leaving it with the networks business and a portfolio of technology patents.

Canon fires into the black

Canon cameraJapanese snapper and printer maker Canon has predicted its first full-year operating profit will rise to 11.4 percent, which is its first rise in three years.

The profit is mostly thanks to earnings from a medical equipment unit it bought from Toshiba Corp last year.

The $5.8 billion acquisition of the unit, which makes X-ray scanners and eye examination machines, is part of Canon’s cunning plan to diversify as demand for its cameras, printers and copier machines wanes amid the spread of smartphones and paperless media.

The company forecast operating profit to rise to $2.3 billion this year compared to the last 12 months. This is pretty much what the cocaine nose-jobs of Wall Street predicted.

Fourth-quarter operating profit fell 25.1 percent from a year earlier, hurt after the yen strengthened following Britain’s vote in June to leave the European Union. This was a bit lower than what analysts predicted but since no one really predicted Brexit most people are prepared to give Canon that one.


Intel reports strong finish to record year

Databroker_scrooge_mcduck-346x260Chipzilla’s supreme dalek Brian Krzanich said that Intel’s last quarter for 2016 was a strong finish to a record year.

He reported that data centre growth was good, Cloud service provider revenue was up 24 percent, and communications service provider revenue grew 19 percent. Internet of Things revenue was also strong.

Krzanich claimed that data growth would continue to skyrocket, creating demand for Intel’s processors. He said that a connected car could generate 4,000 gigabytes of data per day.

He noted that the company has good design wins in connected cars with BMW, Baidu, and Delphi. In artificial intelligence, Krzanich said Intel processors are used in more than 90 percent of machine learning applications.

Client computing sales, which include processors for desktops and laptops, had strong execution and higher average selling prices (up seven percent from a year ago) as customers opted for more gaming computers and high-end PCs, Krzanich said. During the quarter, Intel saw that the worldwide PC supply chain remained healthy and had inventory get used during the three months, said chief financial officer Bob Swan.

However, over all the figures appear to be mixed. Intel misted its target on earnings per share but beating estimates for revenues. The results were driven by revenues from desktop and laptop computer chips, data centre chips, and the Internet of Things. The latter was up 15 percent for the full year.

The cocaine nose jobs of Wall Street had expected Intel to report earnings per share of 75 cents on revenue of $15.8 billion for the fourth quarter. For the full year, they were expected earnings per share of $2.67 on revenue of $58.9 billion. Fourth quater earnings came in at $3.6 billion, or 73 a share, on revenue of $16.4 billion. A year ago, earnings per share were 74 cents, with revenue at $14.9 billion.

Next year though things might change for Chipzilla. AMD is expecting to be more competitive against Intel in 2017 as it readies its new Zen processors for PCs, laptops, and servers and Qualcomm is expecting to put more of its ARM based chips into PCs.

Net income for the year was $10.3 billion, while overall revenue for the year was $59.4 billion. A year ago, net income was $11.3 billion on revenue of $55.4 billion. Intel cut about 12,000 jobs during the year as it restructured to get behind the company’s focused priorities. This includes spinning off McAfee, formerly Intel Security, as a separate business.

Intel expects 2017 to be flat in terms of revenue. Krzanich said the company is taking a conservative view of 2017 PC unit sales than other analysts, but he noted there was record demand for Intel PC chips in Q4. Unit sales for 2017 could decline in the mid-single digit percentages, Krzanich said. Intel is positioning itself to lower its costs during the coming year.

LG Display does rather well

old-school-tvTelly-maker LG Display has reported a record fourth-quarter operating profit of $778.33 million due to a pickup in TV panel prices.

The profit was caused by the upward trend of panel prices and a favourable foreign exchange rate.

Chief Financial Officer Don Kim said that the upwards trend of panel prices is anticipated to continue thanks to the low inventory level in the industry and the trends towards large-size panels.

The price of television LCDs larger than 32 inches has been rising for 10 months, according to data provider WitsView last week.

Analysts said the rise was mainly due to supply-side factors such as rival Samsung’s shutdown of an LCD fabrication plant last year, causing a tight supply-demand environment.

The company said its October-December operating profit rose 1,392 percent from the same period previous year, beating what the cocaine nose jobs of Wall Street had predicted.

Revenue for the quarter rose 18 percent from a year earlier, LG said.

Samsung makes record chip earnings

scrooge-mcduckSamsung Electronics saw record chip earnings which meant it could gloss over the Note 7 smartphone fiasco in the fourth quarter.

The outfit, which is involved in an influence-peddling scandal surrounding President Park Geun-hye, said it expects profit growth in 2017, despite challenges arising from political uncertainty.

The political uncertainty appears to be whether the South Korean government will make Samsung executives accountantable for the scam. So far, the smart money is that it will probably not do that.

Samsung Electronics said in a statement that all this was creating an “uncertain business environment” although it did hint that there was also a changing political landscape abroad too.

All this poses a challenge to the execution of mid- to long-term business strategies, such as M&A and investment decisions and developing new growth engines.

Even so, it flagged higher earnings this year after a slow first quarter, when steeper marketing costs will eat into its bottom line as it tries to rebuild its reputation from the failure of its latest flagship phone.

The world’s top manufacturer of smartphones, memory chips and flat-screen televisions is counting on the booming chip market to continue driving growth and give the mobile business breathing space to rebuild its premium lineup.

The company forecast “stable demand” in 2017 for memory chips, which hit an all-time earnings high in the October-December period.

Fourth-quarter operating profit jumped 50 percent $7.93 billion which was its highest in over three years and matching its prior guidance. Earnings from the chips business soared 77 percent year-on-year. Revenue were flat.

In its mobile business, operating profit rose 12 percent in the fourth quarter as models such as the Galaxy S filled the void following the discontinuation of the fire-prone Note 7 in October.

Samsung claimed that defective batteries caused the Note 7 handsets to overheat and catch fire, and indicated that it may delay the launch of its next premium Galaxy S smartphone as it overhauls its product safety systems.

While the mobile business is struggling, the positive outlook for memory chips used in mobile devices and OLED televisions propelled Samsung’s shares to a series of record-highs this month.