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In the battle between AT&T and Verizon, AT&T has topped its rival, albeit in an undesirable area. After Verizon posted a $2 billion fourth-quarter loss earlier this week, AT&T has followed up with a whopping $6.68 billion fourth-quarter loss.
But AT&T expected the bad news after the failed T-Mobile acquisition. AT&T had to shell out $3 billion in cash-based kill fees and $1 billion worth of spectrum, as well as roaming fees, to the smaller carrier after the deal fell through. AT&T also took a hit on employee pension benefits. AT&T's monumental fourth-quarter loss compares with a $1.1 billion profit in the year ago period.
"We knew these penalties were going to hit AT&T pretty hard. It's money that they can't use to build out their infrastructure, and they are undergoing one of the largest infrastructure change-outs in the company's history," said Rob Enderle, principal analyst at Enderle Group. "This will slow them down a bit because it will cut the resources they've got to improve services. Other than that, it is a one-time charge."
CEO Cites Momentum
That said, AT&T is hardly faltering. The telecommunications giant saw fourth-quarter revenues rise 3.6 percent to $32.5 billion, beating analyst expectations. AT&T posted record sales, strong wireless network performance and improved wireline revenue trends. Enderle said AT&T's financials don't show any major competitive threat that's doing damage - -the firm is fiscally strong.
Much like Verizon, AT&T posted its best-ever smartphone sales quarter. AT&T smartphone sales were up 60 percent over the year-ago period. In fact, AT&T set a record with 9.4 million smartphones sold in the fourth quarter. That's nearly
double the number sold in the third quarter and 50 percent more than the previous quarterly record.
"We had a tremendous year in terms of execution, and we have excellent momentum across our growth platforms," said... newsfactor.com »
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The day after Verizon Wireless posted another LTE network disruption, T-Mobile announced plans to invest $4 billion in its own 4G network. T-Mobile plans to launch a high-speed LTE network in 2013 in hopes of stopping a near-mass exodus of customers to competing carriers.
T-Mobile calls it its "challenger strategy," and plans include deploying advanced hardware at 37,000 cellular sites. T-Mobile said it would tap into the wireless spectrum band AT&T is offering as part of their merger-kill agreement, if the Federal Communications Commission approves the transfer.
"Though we are not satisfied with the contract customer losses and the decreased total revenues, the quarterly margin improvement year-on-year was impressive," said Rene Obermann, CEO of Deutsche Telekom, T-Mobile's parent company. "The spectrum gained through the break-up fee empowers T-Mobile USA to start LTE-based services in key U.S. markets and strengthens its competitiveness."
Blaming iPhone 4S
T-Mobile has to do something. Deutsche Telekom was betting heavily on the AT&T merger to pan out as the carrier continued to bleed market share -- and the bleeding hasn't stopped. T-Mobile lost 802,000 customers in the fourth quarter of 2011. That compares with a loss of 251,000 in the year-ago period.
The churn affected T-Mobile's revenues, albeit only slightly. T-Mobile posted $5.2 billion in fourth quarter 2011 revenues, compared with $5.4 billion in the year-ago period. On the year, total sales dipped 3.3 percent year-over-year to $20.6 billion.
T-Mobile pointed to negative impacts in the fourth quarter from the iPhone 4S launch at AT&T, Verizon Wireless and Sprint. As the only major U.S. carrier without an iPhone in play, T-Mobile is an underdog in the smartphone wars.
"Not carrying the iPhone led to a significant increase in contract deactivations in the fourth quarter of 2011," said Philipp Humm, CEO and president of T-Mobile USA. "In 2012 and 2013, T-Mobile USA will invest... newsfactor.com » | Online game maker Zynga Inc. reported a net loss for the last three months of 2011, weighed down by hefty stock-compensation expenses and other costs in its first quarter as a public company.
Its adjusted earnings and revenue inched past Wall Street's expectations, but that wasn't enough to lift the stock of the company that is behind the most popular games played on Facebook. Zynga's stock fell 6 percent in after-hours trading following its report.
San Francisco-based Zynga said Tuesday that it lost $435 million, or $1.22 per share, in the fourth quarter. That's down from earnings of $16.1 million, or 5 cents per share, a year earlier when it was still privately held.
Adjusted earnings were 5 cents per share in the latest quarter, surpassing Wall Street's expectations by 2 cents. This figure excludes one-time items, including $510 million in stock-compensation expenses triggered by Zynga's initial public offering of stock in mid-December.
Revenue rose 59 percent from a year earlier to $311 million as Zynga grew its user base, ad revenue and the money it makes from games such as "CityVille," "FarmVille and "Zynga Poker." On average, analysts surveyed by FactSet were expecting $302 million.
Investors may have been hoping for more. Zynga's revenue climbed just 1 percent, compared with the third quarter. In contrast, its revenue grew by double-digit percentages from one quarter to the next for the year's first three quarters.
Zynga's IPO raised $1 billion, at the time the largest IPO by a U.S. Internet company since Google's in 2004. Facebook, though, is expected to dwarf both when it goes public in the next few months. The world's largest online social network plans to raise $5 billion in an IPO that could value the company at $100 billion. In comparison, Zynga's market capitalization was about $10 billion as of Tuesday.
Zynga relies on... newsfactor.com » | Cisco beat the street with its second-quarter earnings. The company's net income rose 44 percent in the quarter ended Jan. 28 as Cisco CEO John Chambers continued leading the company out of its 2011 funk.
After a round of layoffs and a renewed focus on its core business, Cisco tallied $2.2 billion in net income during the quarter. That compares with $1.5 billion in the year-ago period. At the end of the quarter, Cisco posted 47 cents per share earnings. Analysts predicted 43 cents per share.
"We are executing well on our three-year plan to drive earnings faster than revenue. Our operational focus continues to yield positive results -- we hit our billion dollar expense reduction a quarter early -- and our ongoing innovation enables our customers to solve their critical business needs," Chambers said. "You will continue to see a focused and aggressive Cisco that is helping our customers use intelligent networks to transform their businesses."
Cisco's Switch Business
Zeus Kerravala, principal analyst at ZK Research, pointed out investor concern for Cisco's switching business in past quarters. It's a valid concern, considering switches are the largest part of Cisco's revenue.
"Much of the industry has been calling for a decline in margins. For a while the margins did decline. Part of that was due to the competitive landscape and some of the products from low-cost providers. I think Cisco was caught off-guard by that because of their lack of focus on networking," Kerravala said.
"Cisco was focused on flip cameras and consumer devices. Chambers made the promise that networking was going to be a focus for them last year and it has been. Now margins for switches are returning to what they were three years ago. For investors, that's a great sign."
Kerravala noted rumblings in the blogosphere about quality. As he sees it, there's... newsfactor.com » | Tech bellwethers Google, Microsoft, Intel and IBM reported earnings Thursday, providing a mixed view of the sector.
Google's fourth-quarter profit came in lower than Wall Street expected. The Internet advertising giant reported a profit of $2.7 billion on revenue of $10.6 billion. Revenue was up 25% from the year-ago quarter. Among factors adding to costs, Google added roughly 1,100 jobs in the quarter.
The Internet search leader also added to its Google+ ranks, reporting more than 90 million users of the social network. That's "well over double what I announced just a quarter ago," said Google CEO Larry Page on the earnings conference call.
Google shares tumbled 9% in after-hours trading to $582.75.
Microsoft's profit didn't disappoint. The software giant reported second-quarter profit of $6.6 billion on revenue of $20.9 billion. Revenue was up 5% from a year earlier. CEO Steve Ballmer talked up the company's prospects for mobile, tablets and PCs for 2012 in the company's earnings announcement.
However, the software giant's Windows franchise struggled. The Windows division posted a 6% decline from a year ago. That was offset by gains in its Entertainment and Devices division. The unit, which includes its popular Xbox 360, reported a 15% uptick from a year earlier.
Microsoft shares rose more than 2% in after-hours trading to $28.84.
Intel's profit came in ahead of estimates. The chip giant reported a fourth-quarter profit of $3.5 billion on revenue of $13.9 billion. Intel's revenue was up 22% in the quarter. Despite a flagging PC market, Intel made advances.
Intel CEO Paul Otellini said this year's lineup of tablets, smartphones and slim laptops known as ultrabooks bodes well for the chipmaker. Shares were up nearly 1% in after-hours trading to $25.81.
IBM's profit met Wall Street's expectations. The software and computing services behemoth reported fourth-quarter profit of $5.5 billion on revenue of $29.5 billion. Revenue... newsfactor.com » | It wasn't Larry Page's best day as Google CEO. That's because he had to deliver his first missed quarterly earnings results to investors.
Blame it on Google's strong foray into mobile advertising, as well as the woes in Europe. Or blame it on cost-per-click, or CPC, price declines. There's plenty of blame to go around in Google's fourth-quarter results. But it's hardly all bad news.
"Google had a really strong quarter ending a great year," said Page. "Full-year revenue was up 29 percent, and our quarterly revenue blew past the $10 billion mark for the first time."
Google's Numbers
Specifically, Google reported revenues of $10.58 billion for the quarter ended Dec. 31. That's a 25 percent increase compared with the fourth quarter of 2010.
Google-owned sites generated revenues of $7.29 billion, or 69 percent of total revenues, in the fourth quarter. That represents a 29 percent increase over year-ago revenues of $5.67 billion. Revenues from outside of the United States totaled $5.60 billion, representing 53 percent of total revenues in the fourth quarter of 2011.
Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of its network members, decreased approximately 8 percent over the fourth quarter of 2010 and decreased approximately 8 percent over the third quarter of 2011.
The CPC Culprit
And therein lies one of the culprits. Indeed, when assessing Google's missed earnings, the blame largely revolves around CPC price declines, according to Greg Sterling, principal analyst at Sterling Market Intelligence.
"There are various theories about why CPC prices dropped, none of which were fully satisfying to the financial analysts who kept asking about it on the earnings call. Google wasn't particularly clear or helpful either in trying to explain it," Sterling said.
"I don't think, however, this is some kind of red flag or negative turning point for... newsfactor.com » | The good news for Samsung Electronics is that it has established itself as a major player in the skyrocketing smartphone market. The bad news: It's struggling in other areas, with a 23 percent drop in earnings year-to-year.
The flagship subsidiary of Seoul, South Korea-based Samsung Group posted record earnings of $2.3 billion for the third quarter of this year, or June to September, for its telecom business, which includes mobile devices. But its quarterly profit in other areas fell 13 percent from the same quarter last year.
Overall, growth in revenue was up 3 percent from the same period last year, with $3.8 billion in operating profit and $36.9 billion in sales.
Demand For NAND
The company said the strong telecom sales were driven by strong sales of its Galaxy line of smartphones, which are available on all four major U.S. carriers and around the world. In a statement, Samsung said semiconductor sales were up from the second quarter, driven by increasing demand for NAND flash chips, and growth in its logical solutions for mobile business, which creates mobile application processors. Samsung said NAND demand for both smartphones and tablet PCs is strong and prices rose in the quarter due to limited supplies.
"Despite the difficult business environment due to the economic slowdown in developed markets, Samsung achieved a solid performance and recovered its double-digit operating profit margin in the quarter, driven by strong sales of our smartphones," said Robert Yi, vice president and head of investor relations.
Looking to the holiday season in the fourth quarter, Samsung expects continued strong sales of phones as well as increased TV sales, but cautions that the weak global economy could mean slower growth than previous years. A verdict in the company's legal battle with Apple over patents could also take a toll on sales.
Win-Win
"Analyst Gerry Purdy of... newsfactor.com » | EBay left investors unimpressed with its predictions for the holiday season even as its namesake site and PayPal online payment service showed healthy growth in the latest quarter.
The company's stock fell more than 4 percent even though eBay said net income grew 14 percent in the third quarter -- thanks partly to consumers shopping and transferring funds using the company's smartphone and tablet apps.
In a conference call with analysts, CEO John Donahoe said the company is looking for an "OK to solid" holiday season. EBay did well during the holidays over the past two years despite the weak economy. Its tempered expectations could signal a generally not-so-jolly holiday season on the horizon for all types of retailers.
For the July-September quarter, eBay said earned $491 million, or 37 cents per share. This compares with $432 million, or 33 cents per share, a year earlier.
Excluding special items, the company earned 48 cents per share, which is what analysts polled by FactSet were expecting.
Revenue increased 32 percent to $3 billion, beating analyst expectations for $2.9 billion.
In eBay Inc.'s marketplaces business, which includes eBay.com and a slew of other e-commerce sites and businesses, revenue rose 17 percent to $1.65 billion. The company has been working to improve the experiences that buyers and sellers have on the site, doing such things as tweaking its search engine and cutting the upfront fees it charges sellers.
EBay had 98.7 million registered users at the end of the quarter, up 6 percent from last year.
Marketplaces' gross merchandise volume -- an important metric that measures the value of all items sold on eBay, excluding vehicles -- rose 16 percent to $14.7 billion.
Revenue from PayPal jumped 32 percent to $1.11 billion as more buyers and sellers used it to complete transactions both on and off eBay.com: The business processed $29.3 billion... newsfactor.com » | Despite setting records and offering plenty of profits, Apple's fourth quarter disappointed Wall Street. Apple announced the results of its fiscal 2011 fourth quarter on Tuesday even as the company continued to grieve the loss of its co-founder Steve Jobs.
Apple posted quarterly revenue of $28.27 billion and quarterly net profit of $6.62 billion, or $7.05 per diluted share. That compares with revenue of $20.34 billion and net quarterly profit of $4.31 billion, or $4.64 per diluted share, in the year-ago quarter. International sales accounted for 63 percent of the quarter's revenue.
"We are thrilled with the very strong finish of an outstanding fiscal 2011, growing annual revenue to $108 billion and growing earnings to $26 billion," said Tim Cook, Apple's CEO. "Customer response to iPhone 4S has been fantastic, we have strong momentum going into the holiday season, and we remain really enthusiastic about our product pipeline."
Wall Street Not Thrilled
Apple sold 17.07 million iPhones in the quarter, a 21 percent boost over the year-ago quarter. Apple sold 11.12 million iPads during the quarter, a 166 percent increase over the year-ago quarter. The company also sold 4.89 million Macs during the quarter, a 26 percent unit increase over the year-ago quarter, and 6.62 million iPods, a 27 percent unit decline from the year-ago quarter. The totals represent all-time record Mac and iPad sales in a single quarter.
"We are extremely pleased with our record September quarter revenue and earnings and with cash generation of $5.4 billion during the quarter," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the first fiscal quarter of 2012, which will span 14 weeks rather than 13, we expect revenue of about $37 billion and we expect diluted earnings per share of about $9.30."
But Wall Street wasn't altogether thrilled. It was the first time Apple failed to meet earnings... newsfactor.com » | Google has announced financial results for the quarter ended September 30, 2011. Despite a still struggling economy, the search engine titan exceeded Wall Street's expectations once again.
Google reported net revenues of $7.51 billion, and $9.72 per share, for the quarter. That's a 33 percent increase compared with the third quarter of 2010. Thomson Reuters financial analysts expected revenue to total $7.21 billion and $8.74 earnings per share. Google's total revenue before traffic-acquisition costs totaled $9.72 billion, setting a new quarterly record.
"We had a great quarter," said Larry Page, CEO of Google, in a conference call. "Revenue was up 33 percent year-on-year and our quarterly revenue was just short of $10 billion. Google+ is now open to everyone and we just passed the 40 million user mark. People are flocking into Google+ at an incredible rate, and we are just getting started!"
Mobile Growth
With the Google+ cheerleading, Page may have been mitigating comments Google Engineer Steve Yegge wrote in a blog post. The post, which called Google+ a "pathetic afterthought," was supposed to be private to Google employees, but it accidentally went public.
Google+ may not be driving significant revenue right now, but Page laid out a major growth area in the earnings call. Google's revenue "run rate" in mobile totals $2.5 billion. And that's up a whopping $1.5 billion from about a year ago.
Google reports there are about 190 million Android devices, including 60 million new activations since July. Google is proving the wisdom of its operating system venture, with most of its mobile revenues likely coming from mobile ads.
"Google obviously had a huge quarter and seems to be firing on all fronts. In particular, mobile has gone from a $1 billion annual run rate a year ago to $2.5 billion today," said Greg Sterling, principal analyst at Sterling Market... newsfactor.com » | Amazon.com Inc. said Tuesday that its second-quarter profit fell despite a 51 percent jump in revenue as the leading online retailer spent heavily to expand its business.
The results easily beat analyst expectations, as did Amazon's third-quarter sales outlook. Its shares rose 6 percent in after-hours trading.
CEO Jeff Bezos attributed the sales growth to "low prices, expanding selection and innovation."
The growth means Amazon must keep investing in operations expansions and upgrades. So far this year, it has announced it is building 15 new order-filling centers. In a conference call with reporters, Tom Szkutak, Amazon's chief financial officer, said he expects that figure to rise.
Overall, operating expenses rose 54 percent to $9.71 billion.
For the second quarter in a row, this cut into its bottom line. The Seattle-based company earned $191 million, or 41 cents per share, compared with $207 million, or 45 cents per share, in the year-ago quarter.
Revenue rose to $9.91 billion from $6.57 billion last year. Amazon's electronics and general merchandise revenue rose 69 percent to $5.89 billion, while sales of books, CDs, DVDs and other media rose 27 percent to $3.66 billion.
Analysts polled by FactSet were expecting a profit of 34 cents per share on $9.37 billion in revenue.
For the current quarter, Amazon forecast revenue of $10.3 billion to $11.1 billion, the midpoint of which is above the $10.40 billion analysts have been hoping for.
As usual, Amazon did not say how many of its Kindle e-readers it sold in the quarter, only indicating that Kindle sales rose when compared with the first three months of the year. During the second quarter, Amazon said it was selling more e-books that it offers for the Kindle than the hardcover and paperback books it carries.
Bezos said the $139 Kindle 3G with Special Offers -- a version of the Kindle released during the... newsfactor.com » | LG Electronics, a top global manufacturer of mobile phones and flat-screen TVs, said second-quarter net profit plunged as sales declined and its mobile phone business remained in the red.
LG earned 108.4 billion won ($103.3 million) in the three months ended June 30, the company said Wednesday. That was down 87.3 percent from net profit of 856.4 billion won a year earlier.
The result snapped two straight quarters of net losses for the Seoul, South Korea-based company, which has been making a push into 3D TVs and smartphones. LG has been trying to turn around its mobile phone business amid tough competition in the fast growing global smartphone market.
LG Electronics Inc. ranks No. 2 globally in flat screen televisions behind South Korean rival Samsung Electronics Co. LG trails global leader Nokia Corp. of Finland and Samsung to rank No. 3 in mobile phones.
Sales in the second quarter fell 0.2 percent to 14.4 trillion won.
LG's mobile communications business, which includes phones, suffered its fifth straight quarterly operating loss in the second quarter. But in a sign of improvement the scale of red ink declined sharply on higher smartphone sales and cost-cutting.
The mobile business racked up an operating loss of 54 billion won, sharply lower than 101 billion won in the first quarter and 119 billion won in the second quarter last year. Sales fell 4.6 percent from last year to 3.25 trillion won.
LG said it sold 24.8 million mobile phones during the quarter, up slightly from 24.5 million in the previous three-month period. The company sold over 10 million Optimus smartphones in the first half of this year, according to company spokesman Ken Hong.
LG's results were also hurt by a loss of 56 billion won from investments in affiliates including flat panel maker LG Display Co. and LG Innotek, which manufactures electronic components.
Results... newsfactor.com » | In good news for the tech sector, Google on Thursday announced earnings for the quarter ended June 30, 2011. Google reported revenues of $9.03 billion.
"We had a great quarter, with revenue up 32 percent year on year for a record-breaking over $9 billion of revenue," said Larry Page, CEO of Google. "I'm super excited about the amazing response to Google+ which lets you share just like in real life."
At a company press conference, Page said the company would continue making significant investments while keeping financial management tight.
"Of course, I understand the need to balance the short term with the longer-term needs because our revenues and growth serve as the engine that funds our innovation," Page said. "But our emerging high-usage products can generate huge new businesses for Google in the long run, just like search, and we have tons of experience monetizing successful products over time."
By the Numbers
GAAP operating income in the second quarter totaled $2.88 billion, or 32 percent of revenues. That compares to GAAP operating income of $2.37 billion, or 35 percent of revenues, in the year-ago period. GAAP net income in the second quarter of 2011 was $2.51 billion, compared to $1.84 billion in the year-ago period.
Google-owned sites generated revenues of $6.23 billion, or 69 percent of total revenues. That's a 39 percent increase over second quarter 2010 revenues of $4.5 billion. And
Google's partner sites generated revenues, through AdSense programs, of $2.48 billion, or 28 percent of total revenues, a 20 percent increase. Revenues from outside of the United States totaled $4.87 billion, 54 percent of total revenues. That's fairly consistent with the year-ago period at 53 percent.
Operating expenses, other than cost of revenues, were $2.97 billion in the second quarter of 2011, or 33 percent of revenues, compared to $1.99 billion in the second... newsfactor.com » | Let Google rejoice and Bing and Yahoo Search hope for the best. Online advertising revenues in the U.S. alone hit $7.3 billion in the first quarter. That's a 23 percent increase over the year-ago period, according to new figures from the Internet Advertising Bureau and PricewaterhouseCoopers.
And here's something else for search engines to celebrate: that $7.3 billion was the highest first-quarter revenue ever in the history of online advertising. Noteworthy is the fact that, despite the recession, the year-ago online advertising revenues also broke a record.
"The consistent and considerable year-over-year growth we're seeing demonstrates that digital media is an increasingly popular destination for ad dollars, and for good reason," said Randall Rothenberg, president and CEO of the IAB. "As Americans spend more time online for information and entertainment purposes, digital advertising and marketing has emerged as one of the most effective tools businesses have to attract and retain customers."
Online Ad Momentum
The news comes just weeks after the IAB reported results for the fourth quarter and the full year of 2010. Specifically, 2010 results set a record for online advertising revenues at $26 billion, up 15 percent from 2009. Fourth-quarter revenue also hit new heights at $7.45 billion, up 19 percent from the fourth quarter of 2009. Now it's a new day and a new year, and the momentum is continuing.
"The year-on-year 23 percent increase in first-quarter revenues is not just impressive in its own right, but especially so when you take into account the fact that 2010 was a record-breaking year itself for Internet advertising revenue," said David Silverman, a partner at PricewaterhouseCoopers. "These numbers indicate that the interactive advertising field hasn't simply bounced back since the recession; it's growing with dynamic energy."
Catching Up with Consumers
Of course, Google is the biggest beneficiary. According to comScore, Google sites led the U.S.... newsfactor.com » | The outlook for Hewlett-Packard is causing a ripple in the stock market. HP revised its third-quarter and full fiscal year 2011 outlook based on anticipated impacts from the Japan earthquake and related events, as well as soft consumer PC sales and reduced operating profit margins for services. HP estimates about $31 billion in revenues for the third quarter and $129 billion to $130 billion for the full fiscal year.
The news caused Intel, Micron Technology, Nvidia, Advanced Micro Devices, and other technology stocks to slip. Micron's stock fell 63 cents, or six percent, in midday trading. Intel shares slipped only 22 cents on the back of an announcement that it will meet its second-quarter estimates.
Hurd's Fault?
Charles King, principal analyst at Pund-IT, called the drop a bloodbath quarter for new President and CEO Leo Apotheker, who replaced Mark Hurd after a sex scandal. King compared Apotheker's early tenure to a president coming into the White House. There's a grace period where disasters early on can easily be blamed on the previous administration and usually are.
"It's fascinating to me that during his time at HP Mark Hurd was seen by many as such a golden boy and such a brilliant operations executive in his ability to wring every bit of profit out of every incremental penny spent on product development," King said. "HP's results can clearly be tied to Hurd's aggressive cost-cutting and the way that he set up the company to compete."
Although HP performed well during Hurd's tenure, even surviving the worst part of the economic downturn and appearing to rebound as the first spurt of consumer optimism emerged in 2010, King said overweighting on consumer business and the thinness of HP's enterprise product and service portfolio is starting to show. He added, "It doesn't give me a lot of optimism for... newsfactor.com » | After years of being a Wall Street darling, Cisco Systems is taking heat from investors in the wake of its third-quarter results. Specifically, the company's forecast has the street concerned. Cisco shares fell three percent to $17.16 Thursday and rallied slightly to close at $17.78 on the NASDAQ.
Here's the numbers for the period ended April 30: Cisco reported third-quarter net sales of $10.9 billion, or 33 cents per share. Net sales for the first nine months of fiscal 2011 were $32.0 billion, compared with $29.2 billion for the first nine months of fiscal 2010. Net income for the first nine months of fiscal 2011 was $5.3 billion, or 94 cents per share, compared with $5.8 billion or $99 cents per share for the first nine months of fiscal 2010.
"This quarter played out as we expected," said John Chambers, chairman and CEO of Cisco. "We have acknowledged our challenges. We know what we have to do. We have a clear game plan, and we are a company with a track record of market-shaping innovation. We thank our shareholders, employees, customers and partners as we transition to the next phase of Cisco."
Cisco a Tanker Ship
During the quarter, Cisco closed several acquisitions and cut some divisions. Cisco completed the acquisition of privately held newScale, which delivers a service catalog and self-service portal for information-technology organizations to select and quickly deploy cloud services.
Cisco also completed the acquisition of privately held Inlet Technologies, a provider of Adaptive Bit Rate digital-media-processing platforms, as well as privately held Pari Networks, provider of network configuration, change management, and compliance management solutions. But analysts aren't bullish, despite the acquisitions and the new customer announcements.
"The company is a tanker ship that will require multiple quarters to fix its long-term financial model," Reuters reported the brokerage Gleacher... newsfactor.com » | The rise of smartphones is leading to a profound shift in the semiconductor industry, as companies that focus on mobile chips have found themselves in computing's new sweet spot.
Qualcomm Inc., whose chips are inside Apple Inc.'s iPhone and more than half of all new smartphones based on Google Inc.'s rival Android operating system, showed Wednesday how lucrative that position can be.
The company reported after the market closed that its net income jumped 29 percent and revenue rose 46 percent in the latest quarter, easily surpassing Wall Street's targets. Stronger sales of its communications chips were key, as were higher licensing fees for Qualcomm's wireless technology.
Qualcomm said it resolved the second of two previously disclosed disputes with licensees, and that the latest quarter included $401 million in revenue related to previous quarters as a result of those settlements.
The company raised its guidance for the current quarter, and its shares rose $2.73, or 5 percent, to $58 in extended trading, after the results were reported.
Qualcomm's net income was $999 million, or 59 cents per share, versus $774 million, or 46 cents per share, a year ago.
Excluding items, the company would have earned 86 cents per share, better than the 80 cents per share that analysts polled by FactSet were expecting.
Revenue rose 46 percent to $3.88 billion, ahead of the $3.62 billion analysts expected.
For the current quarter, the company expects net income of 68 cents per share to 72 cents per share, excluding items. Analysts had predicted 69 cents per share. Qualcomm sees revenue of $3.35 billion to $3.65 billion, ahead of the $3.40 billion that analysts had been forecasting.
The numbers indicate how small, Internet-connected gadgets are reshaping the computer market.
Some analysts have expressed concerns about the ability of entrenched companies in the PC industry such as Intel Corp. and Microsoft Corp. to... newsfactor.com » | Intel Corp. has sent a strong message to Wall Street: Tablets may be transforming the computer industry, but there's still a lot of money left to be made in the huge market for traditional PCs.
Despite all the hoopla around Apple Inc.'s iPad and an army of competitors, Intel reported Tuesday that its first-quarter net income jumped 29 percent as corporate demand for new PCs led to numerous orders for Intel chips.
The results easily topped analysts' projections, as did Intel's second-quarter guidance. Its shares rose more than 4 percent in extended trading.
The stock move reflects the belief of many investors that Intel has plenty of opportunities to plumb its core businesses for more profits as it adjusts to a shifting technology landscape.
Intel, founded in 1968, is among the old guard of the computer industry. It's the world's biggest semiconductor company, with some 80 percent of the world's PCs running its processors.
Newcomers are challenging its dominance in PCs with mobile gadgets including smartphones and tablet computers. But the latest numbers show that Intel has scale and some of the most sophisticated manufacturing technology in the world to beat back those pressures -- for now.
Intel earned $3.16 billion, or 56 cents per share, in the first quarter, which was higher than the 46 cents per share that analysts polled by FactSet expected. A year ago, Intel earned $2.44 billion, or 43 cents per share.
It brought in revenue of $12.8 billion, a 25 percent increase from $10.3 billion a year ago and higher than the $11.6 billion that analysts expected.
The second-quarter revenue forecast of $12.3 billion to $13.3 billion was also higher than the $11.9 billion analysts were expecting.
Intel shares rose 91 cents, or 4.5 percent, to $20.77 in extended trading.
Strong corporate demand for PCs is helping Intel overcome a series of problems. It... newsfactor.com » | AT&T said it sold more than 5.5 million smartphones in the first three months of 2011 -- an increase of more than 60 percent year over year. Despite losing its iPhone exclusivity in February, more than 3.6 million iPhones were activated on the wireless carrier's nationwide network in the first quarter, with 23 percent representing commitments from customers new to AT&T.
Mobile broadband networks are driving unprecedented growth and innovation, and AT&T is playing a leading role in bringing these benefits to customers, noted AT&T CEO Randall Stephenson.
"That's why our agreement to acquire T-Mobile USA, which we announced in March, is so important," Stephenson said. "Combined, the two companies' spectrum and network assets will allow us to simultaneously address spectrum issues created by this increased demand and improve customers' network experience as volumes continue to grow."
Strong Wireless Revenues
But AT&T can't argue that it needs T-Mobile to maintain a healthy corporate bottom line. During the first quarter, AT&T's wireless revenues -- including equipment sales -- were up 10.2 percent year over year to $15.3 billion. Moreover, the carrier's wireless data revenues rose 23.9 percent to $5.1 billion.
Total text-message traffic on AT&T's cellular network grew more than 25 percent to 179.8 billion, even as multimedia messages increased 54.2 percent to 3.7 billion. The wireless carrier also added 421,000 branded-computing subscribers in the first three months.
Though the carrier's branded-computing category includes aircards, MiFi devices, tethering plans, and other data-only devices, most of AT&T's new additions were web tablets -- with 322,000 devices added in the first quarter. Furthermore, 80 percent of AT&T's tablet additions in the quarter were booked to the prepaid category, the company said.
AT&T surprised industry observers by reporting a first-quarter subscriber-churn rate of 1.36 percent, versus 1.32 percent in the final quarter of 2010. Stephenson warned... newsfactor.com » |  Digital Trends - Apple has posted its financial results for its first fiscal quarter of 2011, which includes the end-of-year 2010 holiday season, and the figures are stunning: the company had record revenue of $26.74 billion for the quarter and earned a record $6 billion for the quarter. Year-on-year, the figures represent a 71 percent growth in revenue and a 78 percent growth in earnings, and sales of almost everythingГўВЂВ”from iPhones to iPads to the venerable MacintoshГўВЂВ”were up. The sole unsurprising exception: iPods, which saw their sales down 7 percent compared to a year ago. Yahoo! News: Personal Technology » |
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