Tag: results

Samsung laughing despite melting phones

laughing-camelSamsung is likely to forecast its best quarterly profit in nearly three years this week thanks mostly to good memory chip sales.

It would have been a lot better had it not for those pesky melting smartphones it released. The South Korean firm discontinued sales of the Galaxy Note 7 phones after some of the devices caught fire, warning of a $2.1 billion hit to its profit in the fourth quarter of 2016 due to expenses tied to an ongoing global recall and lost sales.

But a surge in sales of memory chips and organic light-emitting diode screens for smartphones will provide Samsung with a pile more cash than expected.

Samsung’s operating profit likely rose for a second straight quarter to $7 billion over October-December this is up 37 percent from a year ago, and the highest since the first quarter of 2014.

Memory chip prices have spiked recently on demand for more firepower on mobile devices. But it is the sales of the higher-end 3D NAND chips which have rallied significantly, helping Samsung rake in profits given it is ahead of its rivals such as Toshiba Corp and SK Hynix in the mass production of these chips.

Much depends on how badly the mobile business does with the incredible melting smartphone but most expect Samsung to make a huge profit this year.

For the recently ended quarter, Samsung’s mobile earnings likely rebounded from the dismal third quarter on healthy sales of the Galaxy S7 and S7 edge smartphones, analysts said.

Shares in the company have increased by 43 per cent in 2016 suggesting investors did not expect a serious business impact from Samsung’s name being dragged into a growing political scandal in the country.

Sage doing rather well

bunch-of-sage-leavesThe number crunching software outfit named after something which ends up in a turkey at Christmas is doing rather well and announced that it has posted strong annual numbers.

Sage announced it had achieved its fastest rate of recurring revenue growth for a decade in its financial year ending 30 September 2016. Total revenues rose 9.3 percent to £1.57 billion, with growth of 6.1 percent. The UK and Ireland more than pulled their weight, with seven percent organic growth.

Recurring revenue growth hit 10.4 percent. Organic operating profit, meanwhile, rose 9.2 percent to £427 million.

Sage talked up its Sage Marketplace, a distribution platform that allows ISVs to showcase add-ons for its products, including Sage One and Sage Live, which it launched in February. More than 215 ISV apps have signed to Sage Marketplace during the year.

Sage Live, a cloud accounting solution based on Salesforce hardware was launched in the USA and UK in February, now has 600 customers, with over 400 added in the past 90 days, Sage boasted.

Pegg, which Sage bills as “the world’s first accounting chatbot”, has amassed 9,000 users for Sage in 125 countries since its launch in July, the LSE-listed vendor added.

Phase one of a transformation programme saw Sage cut general and administrative expenses as a proportion of revenue from 18.7 to 16.5 percent year on year and renew its senior management team, and is now complete, the vendor said.

Sage CEO Stephen Kelly said: “FY16 saw Sage continue to deliver on the commitment made at our June 2015 Capital Markets Day to perform and transform. The organic revenue growth of six per cent is driven by higher-quality recurring revenue, which grew at the fastest rate in a decade. The strategy is working – with customers embracing closer relationships with Sage, evidenced by a 46 percent increase in the number of subscription contracts and a contract retention rate of 86 percent.

Phase two of the transformation effort will focus on “driving more technology innovation and increasing focus on new customer acquisition”.

Fitbit runs out of breath

f89d75a69595b21228964ff6170a9953Fitness device maker Fitbit is predicting that its key-holiday shopping quarter will fall well below of analysts’ estimates, hurt by soft demand and production issues related to its new Flex 2 wristband.

Shares of the company, which also reported lower-than-expected quarterly revenue, immediately plummeted by a third and were set to hit record-low levels on Thursday.

Fitbit forecast revenue of $725 million to $750 million for the October-December quarter, while the cocaine nose-jobs of Wall Street thought that $985.1 million was more reasonable.

This implied revenue growth of 5.4 percent at the top end. Analysts were expecting growth to pick up to 38.4 percent from the 23.1 percent in the latest third quarter, which is the smallest rise since the company went public in June 2015.

Chief Executive James Park said the outfit was growing and was profitable, just not at the level that people expected.

Fitbit’s transition to its newer products, greater-than-anticipated softness in the wearables market and production issues with the new Flex 2 wristband were the chief causes for the weak outlook, Chief Financial Officer Bill Zerella said.

The production issue – Fitbit found it “incredibly difficult” to find small-enough batteries to fit – started in the third quarter and is not expected to be resolved before the end of December, Zerella said. He estimated that hit Fitbit’s revenue forecast by about $50 million.

Fitbit, which launched two new fitness wristbands, Charge 2 and Flex 2, in late August, said it sold 5.3 million devices in the quarter, edging past analysts average estimates of 5 million, according to research firm FactSet StreetAccount.

However, the average selling price for its devices fell to $93 from $99 in the prior quarter, and missed analysts’ average estimate of $98.25.  All this meant that Fitbit’s total revenue of $503.8 million missed analysts’ average estimate of $506.9 million.

It was also not particularly popular in the Asia Pacific market where it fell 45.1 percent to $35.7 million.

Operating expenses jumped 52.4 percent, largely due to higher research and development costs. The company’s net income plunged about 75 percent to $26.1 million.

 

Shine goes off Apple

poison-appleApple has finally admitted that growing sales are a thing of the past and it reported its first annual sales decline since 2001.

Annual sales fell to $216 billion in the 2016 fiscal year ending September 30, from a record $234 billion in 2015.

The sales decline is closely connected to the falling sales for the iPhone, which remains Apple’s largest source of revenue.

Apple sold 45.5 million iPhones in the September quarter, down from 48 million iPhones in the same quarter a year earlier. That marks the third consecutive quarter when iPhone sales and overall revenue have declined from a year prior.

The Tame Apple Press has rushed to say that the global smartphone market is saturated and customers are taking longer to replace their phones. However everyone has to admit that Jobs’ Mob didn’t help its case by releasing the iPhone 7 which is a “dead ringer”  for the previous two models.

Of course Apple CEO Tim Cook kept on spinning claiming that demand for the new iPhones is “outstripping supply in the vast majority of places, particularly on the iPhone 7 Plus”.

However, the reality is that Apple’s sales in China, once a promising area of growth, fell 30 percent year-over-over year.

Cook claims that next year will be better in China as the country gets a stronger middle class which can afford to waste money on its products.

“We are very bullish on China,” Cook said on the call, noting the vast number of “people growing into the middle class”.

Apple is projecting that it will post sales of $76 billion to $78 billion in the upcoming quarter, up from $74.8 billion a year earlier.

The holiday quarter is typically Apple’s largest as it represents the first full quarter when new iPhones are on sale. Apple’s guidance suggests it is expecting greater demand for the iPhone 7 than its predecessor.

Apple stock was down 2.5 percent in after hours trading following the earnings release.

Microsoft’s cloud move paying off

Ary Pleysier - Beach View with Boats - Wikimedia CommonsSoftware King of the World, Microsoft is now the belle of Wall Street with its latest results, thanks mostly to its cunning cloud plans.

Volish sales of its flagship cloud product doubled in its first quarter, propelling earnings above analysts’ estimates and sending its shares to an all-time high, breaking past a level hit in 1999 at the peak of the tech stock bubble.

Microsoft shares have doubled since August 2013 with Chief Executive Satya Nadella restoring investor confidence by focusing on mobile and cloud computing rather than PCs.

Sales from its flagship cloud product Azure, which businesses can use to host their websites, apps or data, rose 116 percent. Revenue for its broader “Intelligent Cloud” business rose 8.3 percent to $6.38 billion, beating analysts’ average estimate of $6.27 billion.

The company forecast that sales for its Intelligent Cloud business will be between $6.55 billion and $6.75 billion in the current quarter, compared with $6.34 billion in the same period a year earlier.

Microsoft was one of the first to invest in cloud technology, which made a change from its usual business method of waiting until something was established.It found itself outflanked by Google on the Internet and Apple in consumer technology, as PCs became more robust and did not need upgrading.

Earlier this year, Nadella made headlines when he orchestrated Microsoft’s biggest-ever deal, agreeing in June to buy the social network for professionals LinkedIn for $26.2 billion.

Revenue in the unit that includes Windows software and the company’s struggling mobile business fell 1.8 percent to $9.29 billion. Microsoft forecast the division will have sales of up to $11.6 billion in the current quarter – well below the $12.7 billion it posted for the unit a year earlier.

Microsoft reported revenue of $22.33 billion, above the average estimate of $21.71 billion.

Alphabet sorts out its advertising soup

Alphabet Soup-001Alphabet, the outfit formally known as Google, which has somehow becomes Google’s parent has said that its efforts to push its vast advertising business toward mobile is paying off.

The company posted second quarter earnings which beat Wall Street’s expectations and put to rest lingering concerns about how the rise of mobile might impact Google which has relied on desktop search traffic to power its profits.

Alphabet said revenue grew by 21.3 percent to $21.5 billion, while earnings jumped to $4.88 billion from $3.93 billion for the comparable period a year ago.

The company’s shares rose 6.5 percent to $816 in after-hours trading on Thursday.

Google Chief Executive Officer Sundar Pichai said during a call with investors that videos were also doing well. Over the past year, Google, Facebook and Twitter have all doubled down on video, a format where advertisers are willing to pay a premium for a few seconds of users’ undivided attention.

Google has used artificial intelligence to improve video recommendations to users, driving more engagement on the site, Pichai said.

“Video is a huge component of digital content, and YouTube continues to shine,” he said. “It’s a thriving home for creators.”

Google and other tech players are hoping to siphon advertising dollars from traditional television, where advertisers will spend a projected $70.6 billion in the U.S. this year, according to market research firm eMarketer. YouTube is in a prime position to strike, with an audience of more than 1 billion users, including more 18-34 and 18-49 year-olds than any U.S. cable network.

Revenue at Alphabet’s Other Bets business rose 150 percent to $185 million, while operating losses widened to $859 million.

The division includes broadband business Google Fiber, home automation products Nest, self-driving cars and X – the research facility that works on “moon shot” ventures.

Google’s ad revenue rose 19.5 percent to $19.14 billion, while it notched a 29 percent rise in paid clicks, where advertisers pay the company only if a user clicks on the ad.

Google’s other revenue surged 33 percent, driven by gains in the cloud computing business, in which Google competes with Microsoft and Amazon to rent computer servers to other companies.

 

Facebook still growing like topsy

what-we-learned-about-facebook-ceo-mark-zucke-L-gl5gYRSocial notworking outfit Facebook is raking in money and surprised Wall Street with its estimates, sending its shares to an all-time high.

Facebook now has more than 1.7 billion monthly users, well ahead of any rivals.

Analysts say the company has managed to transform itself from when it first went public.  It managed to leap from desktop to mobile and find advertisers to back it.

Mobile advertising revenue accounted for 84 percent of the company’s total advertising revenue, compared with 76 percent a year earlier.

Total advertising revenue surged 63 percent to $6.24 billion, beating the average analyst estimate of $5.80 billion.

The company also saw strong growth in monthly active users, now boasting 1.71 billion as of June 30, up from 1.49 billion a year earlier. Time spent on its suite of apps, including the main Facebook app, Instagram and Messenger, increased “double digit percentages,” Chief Executive Mark Zuckerberg said on a conference call with analysts.

David Wehner, Facebook’s chief financial officer, pointed to Asia-Pacific, especially India, as one of the most promising areas for continued user growth. The region “has been a consistently good performer for us over the last several quarters and we will continue to invest our global sales resources to drive opportunities there,” Wehner said in an interview with Reuters.

Facebook is one of the biggest beneficiaries as advertisers move money away from television to the internet and mobile platforms.

The company is also courting advertisers to experiment with Facebook Live, its recently launched live video feature. Executives said they were working to become a “video first” platform, and identified private messaging as a growing focus.

Zuckerberg reiterated his company’s glorious 10-year plan on the call with analysts. He said that over the next three years, it will focus on continuing to grow its massive user base, especially in developed nations, and over the next 10 years it will look to build new technology to get more people online and using Facebook through internet-beaming drones.

Meanwhile, Facebook still has several untapped areas for revenue opportunities, including its WhatsApp and Messenger apps, both of which have more than 1 billion users.

Facebook also owns picture-sharing app Instagram, which recently announced it has more than 500 million users. Facebook has yet to say how much money Instagram makes, but research firm eMarketer predicts it will make $1.5 billion in revenue this year.

Net income attributable to Facebook’s stockholders rose to $2.05 billioncompared with $715 million last year. Total revenue rose 59.2 percent to $6.44 billion, ahead of analysts’ average estimate of $6.02 billion.

Twitter results disappoint Wall Street

Wall Street is very disappointed with TwTwitteritter and is talking about the outfit being sold or at very least its CEO Jack Dorsey being forced to walk the plank.

Twitter announced second quarter earnings that missed estimates and the company provided a  lower than expected outlook.

Its share price fell almost 15 percent and Twitter shares are down 50 percent since Dorsey returned last summer to the helm of the social media company he co-founded.

In fact Twitter continues to show almost no growth in its user base of a little over 300 million and its  advertising revenues are softer than a baby’s bottom.

The company cut its forward revenue estimate for the next quarter to $590 million- $610 million, while analysts had been expecting $681 million.

At a market cap of about $11 billon, compared with more than $40 billion at its peak, Twitter could now be a more attractive takeover target.

Verizon, which owns AOL, this week said it would buy Yahoo for $4.8 billion. Google, Disney and Apple have also been mentioned as possible acquirers of Twitter.

Twitter surged briefly earlier this month after Microsoft announced its acquisition of LinkedIn, as investors hoped for a similar deal for Twitter, but it seemed that Vole was not going to be that silly.

 

iPhone sales continue to slide as press spins

disappointment-valleyThe Tame Apple Press is in full spin mode this morning after Apple admitted that sales of its iPhone continued to slide.

Some desperate press even suggested that the fall of the iPhone was not “real” because sales of the iPhone 6 were so high it just made the slide look worse.  Others quoted CEO Tim Cook saying that Apple was going to come up with some super, cool, technology to replace the iPhone as Apple’s cash cow.

However at the end of the day Apple’s iPhone business has hit a wall and there is no opening in sight.  March-quarter units’ sales this year came in at 51.2 million iPhones, which was down from 61.2 million units in the same quarter last year.

It will get worse too because this year’s new iPhones will hardly be an upgrade and some of us are predicting further iPhone sales declines that reach well into 2017.  If that happens Apple is going to have a devil of a job clawing back sales.

The Tame Apple Press did its best to spin the figures too.  Jobs’ Mob earned $7.8 billion in net income, on sales totalling $42.4 billion. That is a slide from $49.6 billion.  The press tells us that figure was a record and should not be used to gauge Jobs’ Mob’s current performance.  It was better than analysts had predicted, it claimed.  Given that analysts were expect it to be $42.1 billion we are not talking a big difference. It was also in the middle of what Apple itself had expected (although at the time the Tame Apple Press assured us that Apple guidance’s were always on the conservative side) .

All this promotion did help Apple avoid any slide in share price, but Cook’s attempts to calm long term investors were less successful.

Cook stressed that Apple is high on augmented reality for the long-run” and investing heavily. Augmented reality, in which computer-generated content is overlaid on the real world, is one of the latest fixations in the technology business, with Pokemon GO among the first applications to catch on.

Cook also highlighted Apple’s investment in artificial intelligence, which the company now uses to recommend content to users and even spot usage patterns to improve a device’s battery life.

However, the comments were weird. Apple has no AI or AR products in the works yet and if they were they are a long way away. In fact, Augmented reality and artificial intelligence don’t really work for Apple. It really is not an innovative company, it needs other people to create it before it appears on the market and claims to have invented it.

Analyst Bob O’Donnell of TECHnalysis Research said that Apple was wanting the world to know that they are working on it, but they have nothing to show for it.  Which is basically what in the real press we call “spin”.

 

Analysts think Big Blue has set the bar too high

EEQnWFSIn its results announcement , IBM gave a full-year profit target many analysts sets the bar too high and will result in the outfit ending up on its back while the bar sails throw the air.

Analysts who are a big fan of bars generally think that Big Blue has made solid progress as it shifts into high-growth areas such as cloud-based services, and both profit and revenue beat analysts’ expectations in the second quarter.

But the company may have over-egged the pudding by sticking to its full-year adjusted earnings forecast of at least $13.50 per share, analysts said, especially after it indicated that profit in the current quarter would come in below estimates.

To meet the target, IBM would need to turn in its best sequential improvement in profit in nine years in the fourth quarter

Bernstein analyst Toni Sacconaghi said that it was possible, but unlikely.

IBM, which reported a profit of $14.92 per share from continuing operations last year, has missed its full-year target for the last two years.

The company’s shares were down slightly at $159.53 in early afternoon trading on Tuesday, having risen about 16 percent since the start of the year.

Chief Financial Officer Martin Schroeter indicated IBM would report a third-quarter profit of $3.11 to $3.24 per share.

That means IBM will need to report a profit of between $4.96 and $5.09 per share in the fourth quarter to hit its target.

Analysts on average expect earnings of $3.22 per share for the third quarter and $4.96 in the fourth.

Investors and analysts have raised doubts about IBM’s ability to increase revenue growth in its newer cloud-based and analytics businesses at a pace fast enough to make up for falling revenue in its traditional hardware businesses.

Still, at least eight brokerages raised their price targets on IBM’s stock after the company reported its smallest revenue decline in eight quarters.