The Tech News Blog

October 25, 2013

Despite Dip in Windows Sales, Microsoft Posts Record Quarter

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Microsoft on Thursday reported record sales of $18.5 billion for its fiscal first quarter, with net income jumping by a healthy 17 percent from a year ago to $5.2 billion.

Redmond's revenue picture was buoyed by a 10 percent increase in corporate software sales, a 47 percent jump in search-related ad sales, and increased sales of Microsoft's Surface tablet after a series of price cuts.

But revenue generated from Microsoft's flagship product, Windows, fell by 7 percent in the quarter compared with the same period a year ago. Compared with the great success of Windows 7, the company's Windows 8 operating system has proven a disappointment since its release last October.

Microsoft recently released Windows 8.1, an upgrade that addresses many of the criticisms leveled at Windows 8. For its fiscal first quarter, the company deferred $113 million in revenue related to pre-sales of Windows 8.1.

Microsoft CEO Steve Ballmer, who is set to step down in less than a year, pointed to Windows 8.1 and other new and soon-to-be-released products as offering good reasons to be bullish on the company going forward.

July 27, 2013

Analyst: Samsung Finally Overtakes Apple for Mobile Operating Profits

Apple iPhone 5 (AT&T)

Time to mail back the trophy, Apple.

Research firm Strategy Analytics is estimating that Samsung's second-quarter operating profits have finally overtaken Apple's to the tune of $5.2 billion to $4.6 billion. We say estimating, as these are figures that the companies don't specifically report – although Samsung did indicate that the company's mobile division hit $5.6 billion in profits in its Q2 earnings statement, the slight disparity in figures comes from non-mobile sales.

So, what helped carry Samsung to its second-quarter success over Apple in the mobile market? According to Strategy Analytics' Neil Shaw, a senior analyst, Samsung combined high sales volumes and high wholesale prices while simultaneously trimming the fat on its overall costs.

Apple, which had previously been the world's most profitable smartphone vendor since the third quarter of 2009, is currently facing two main threats to its profit margins: A lower percent of iPhone 5 sales compared to the company's other smartphones, which Apple will attempt to bolster by allegedly introducing the company's first trade-in program and possibly splitting the iPhone 5 brand into a high-end and mainstream smartphone. Additionally, Apple is having to deal with stronger competition from its manufacturing rivals.

"Samsung is performing well in the US market, while Huawei, ZTE and other local brands are growing vigorously in China. Apple is now under intense pressure to launch more iPhone models at cheaper price-points or with larger screens to fend off the surging competition and recapture lost profits in the second half of 2013," said Strategy Analytics executive director Neil Mawston in a statement.

July 18, 2013

Microsoft Reports Decent Quarter, Elaborates on Big Restructuring Effort

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Microsoft on Thursday reported quarterly sales of $19.9 billion for the period ending June 30, while also elaborating on a major new reorganization underway at the company, which is intended to boost collaboration and communication among Microsoft's various teams and products.

The software giant's revenue for its fiscal fourth quarter was up 10 percent year over year, a result that seemed to buck the sluggish sales trend affecting the global PC industry. Operating income was a robust $6.1 billion, considerably better than the $192 million reported in the same period in 2012, though the year-ago quarter saw a whopping $6.2 billion impairment charge drag down its numbers.

"We are working hard to deliver compelling new devices and high value experiences from Microsoft and our partners in the coming months, including new Windows 8.1 tablets and PCs. Our new products and the strategic realignment we announced last week position us well for long-term success, as we focus our energy and resources on creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work, and on the go, for the activities they value the most," Microsoft CEO Steve Ballmer said in a statement.

During a call with investors and analysts, CFO Amy Hood elaborated upon the reason for the coming changes at Microsoft. "I want to be clear—we know we need to do better, which is why we instituted the reorganization we did last week," she said.

May 22, 2013

HP Posts Losing Quarter as Struggles Continue

HP corporate

Hewlett-Packard's struggle to turn things around continued in the second quarter as the computing giant reported double-digit year-over-year declines in revenue and net income. But CEO Meg Whitman on Wednesday promised that better times were around the corner.

HP reported second-quarter sales of $27.6 billion, down 10 percent from the second quarter of 2012, and profits of $1.1 billion, a 32 percent decline from the year-ago period. Earnings per share (EPS) of $0.55 was also down 31 percent, but in the second quarter, HP did return $1.1 billion in cash to shareholders in the form of dividends and share repurchases, the company said.

"After returning more than a billion dollars to shareholders through share repurchases and dividends in the quarter, we improved our operating company net debt position for the fifth successive quarter. By the end of fiscal 2013, we expect our operating company net debt to be below pre-Autonomy levels and approaching our goal of approximately zero," Whitman said in a statement, referring to HP's 2011 acquisition of enterprise software developer Autonomy and the $8.8 billion impairment charge the company was hit with over that deal.

Whitman shot from the hip during an earnings call Wednesday afternoon, telling investors and analysts that there were "no excuses" for HP's recent performance and execution.

"We need to a better job in transitioning from the technologies that worked in the past to the technologies which will work in the future. There are no excuses. We simply have to perform better," she said.

May 16, 2013

95 Percent of Q1 Android Smartphone Profits Went to Samsung

Samsung logoGlobal Android smartphone profits reached approximately $5.3 billion during the first quarter, but just one company took home the lion's share of that cash: Samsung.

According to stats from Strategy Analytics, Samsung's Android smartphone shipments resulted in $5.1 billion of worldwide profit during the quarter, or 95 percent.

"An efficient supply chain, sleek products and crisp marketing have been among the main drivers of Samsung's impressive profitability," Strategy Analytics' senior analyst Woody Oh said in a statement.

LG landed at No. 2 with 2.5 percent, while "others" made up the remaining 2.7 percent, Strategy Analytics said.

"LG delivered a small profit during the quarter, but it currently lacks the volume scale needed to match Samsung's outsized profits," Oh said.

Overall, the smartphone industry saw $12.5 billion in profits during the quarter, 43 percent of which went to Android.

According to stats released this week from Gartner, Samsung was the No. 1 mobile phone maker, capturing 23.6 percent of the market with more than 100 million units sold in the first quarter. In the smartphone realm, the company's share was higher, at 30.8 percent, with 64.7 million units sold.

"Samsung is, for now, the undisputed king of the global Android smartphone industry," Neil Mawston, executive director of Strategy Analytics, said in a statement. "We believe Samsung generates more revenue and profit from the Android platform than Google does."

Samsung could use its strong reputation and massive power to influence the future direction of the Android ecosystem, Mawston suggested, adding that Samsung could request first, or exclusive, updates of new software from Google before rival hardware vendors.

April 23, 2013

Apple Sells 37.4M iPhones, 19.5M iPads

iPad mini

Apple moved 37.4 million iPhones and 19.5 million iPads in the first quarter, which was down from its fourth-quarter numbers, but an improvement over the same time period last year.

Cupertino reported first-quarter profit of $9.5 billion, which was down from the $11.6 billion it reported in the same time period last year. Revenue landed at $43.6 billion, up from $39.2 billion last year. International sales made up 66 percent of the quarter's revenue, Apple said.

The 37.4 million iPhones sold was down from the 47.8 million it sold during the fourth quarter, but up from the 35.1 million iPhones sold during the same time period last year. Apple unveiled the iPhone 5 in Q4, however, so a drop-off is to be expected.

Customers snapped up 19.5 million iPads in the first quarter, meanwhile, down from the 22.9 million it sold in the fourth but up from the 11.8 million sold in the year-ago quarter.

Apple sold just under 4 million Macs in the quarter, down from 4.1 million in the fourth quarter and 4 million a year ago.

"We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad," Tim Cook, Apple's CEO, said in a statement. "Our teams are hard at work on some amazing new hardware, software and services, and we are very excited about the products in our pipeline."

Apple now has a cash pile of $145 billion, according to CFO Peter Oppenheimer.

April 19, 2013

Microsoft’s Strong Quarter Leaves Critics in the Dust

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Microsoft may be having the last laugh with Thursday's report that the company enjoyed a strong uptick in sales and profits for the first three months of 2013.

The software giant pulled in revenue of $20.5 billion in its fiscal third quarter, up 18 percent from the same period in 2012, while also reporting operating income of $7.6 billion, up 19 percent, and diluted EPS of $0.72, up 20 percent.

"The bold bets we made on cloud services are paying off as people increasingly choose Microsoft services including Office 365, Windows Azure, Xbox Live, and Skype. While there is still work to do, we are optimistic that the bets we've made on Windows devices position us well for the long-term," Microsoft CEO Steve Ballmer said in a statement.

Microsoft's financial results are always closely watched, but never more so than in the wake of reports from IDC and other research firms that PC sales around the world have declined precipitously in recent months.

PC makers shipped 76.3 million units in the first three months of the year, a 13.9 percent decline from the same period in 2012, according to an IDC report issued about a week ago. That's the steepest year-over-year decline since the research firm began tracking the PC market's quarterly performance in 1994, IDC said.

April 16, 2013

Intel’s Rough Quarter Reflects Moribund State of PC Industry

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Intel on Tuesday divulged declining numbers across the board in a first-quarter earnings report which pointed to continued struggles for the PC industry.

The chip giant, the world's leading supplier of processors and chipsets for Windows-based laptops and desktops, reported $12.6 billion in sales for its first quarter, down 7 percent sequentially and down 2 percent year-over-year. Net income of $2 billion represented a decline of 17 percent from Intel's profits in last year's final quarter and a 26 percent drop from the first quarter of 2012.

Intel's declining financials reflected ongoing problems for PC makers and suppliers faced in recent years with stiffer competition from makers of mobile devices like smartphones and tablets. Microsoft's release of Windows 8 last October has apparently done little to reinvigorate a moribund PC market; nor has Intel's own Ultrabook initiative to push ultra-thin, fast-booting laptops with long battery life to better compete with mobile devices.

Still, Intel president and CEO Paul Otellini put a brave face on the numbers.

"Amidst market softness, Intel performed well in the first quarter and I'm excited about what lies ahead for the company. We shipped our next generation PC microprocessors, introduced a new family of products for micro-servers, and will ship our new tablet and smartphone microprocessors early this quarter," Otellini, who will step down as the company's chief executive next month, said in a statement.

January 29, 2013

Amazon Profits Take a Hit as Transition to E-Books Continues

Amazon Headquarters

Amazon boosted its sales in the holiday quarter but net income was down as the online retail giant said it continues to feel the effects of transitioning from physical book sales to digital media for consumption on its own Kindle devices and other platforms.

The company is selling a lot of Kindle tablets and ereaders—for the second year running, the Kindle Fire HD was "the No. 1 best-selling, most gifted, and most wished-for product" in Amazon's enormous product catalog—but sluggish fourth-quarter sales growth in the product that launched the company, books with actual pages, was the lowest in Amazon's history.

"We're now seeing the transition we've been expecting. After five years, e-books is a multi-billion dollar category for us and growing fast—up approximately 70 percent last year," Amazon CEO Jeff Bezos said in a statement. "In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5 percent. We're excited and very grateful to our customers for their response to Kindle and our ever expanding ecosystem and selection."

Amazon's net sales of $21.3 billion for the fourth quarter of 2012 represented a 22 percent increase from the same period in 2011. Operating income was also up 56 percent year-over-year but holiday quarter net income of just $97 billion was down 45 percent.

For the full year, Amazon's net sales came in at a healthy $61.1 billion, up 27 percent from its fiscal 2011, but 2012 operating income of $676 million was down 22 percent and the company wound up posting a loss of $39 million on the year after reporting profits of $631 million in 2011.

January 25, 2013

AT&T is More Profitable But Falls Short on Expectations, Customer Additions

AT&T, Inc., unlike its rival Verizon Wireless, saw profits climb for Q4 2012.  However, that still wasn't enough to reach analyst expectations.

Analysts predicted a profit of $0.4545 USD/share on revenue of $32.2B USD.  AT&T delivered a profit of $0.44 USD/share (after one-time charges) on revenue of $32.6B USD.  AT&T did reward shareholders with $4.4B USD in stock buybacks for the year, taking its total for the year to $12.8B USD.

AT&T sold 10.2 million smartphones for the quarter, which it claims is a record for any American phone carrier.  IPhone upgrades accounted for the majority of those sales; in total AT&T sold 8.6 million iPhones, ahead of Verizon's 6.2 million iPhones sold.  AT&T added 780,000 total new post-paid subscribers, less than the 2.1 million Verizon tacked on.

If Verizon is winning the war of customer additions, AT&T is winning on the profitability front.  However, both of America's top two carriers fell slightly short of analyst hopes amid various issues, including damage from Hurricane Sandy.

Ma Bell continues to grow its U-Verse cable service, which is slowly creeping across the country.