q22013
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Lenovo sells a record four devices per second as phone and tablet demand soars
In stark contrast to Dell, with its corporate upheavals and hygiene issues, Lenovo's business is still booming. The company sold a record 29 million devices last quarter and saw double-digit rises in revenue and profit -- a level of growth that almost makes it seem like it has stepped out of the stagnant PC market and into something illegal. What's actually happening, however, is healthy and continuing diversification: unit sales of smartphones and tablets overtook PCs back in the summer, and now, when combined with smart TVs, account for 15 percent of Lenovo's revenue -- versus eight percent a year ago and just four percent the year before that. With the company's regular PC trade also in good shape, snatching nearly an 18 percent slice of that traditional market, it's perhaps a shame that the company has reportedly been prevented from expanding even faster.
Sony sells more smartphones, but suffers from drop in demand for cameras, PCs
Sony's hugely improved smartphone range have done well for the company, and mobile sales in the last quarter have increased 39.3 percent since the same period last year. However, the rest of the financial news makes less cheery reading for Sony fans. In total, the company's cut its annual profit forecast down to 30 billion yen (roughly $300 million) -- a 40 percent decrease from the 50 billion yen it expected to pull in, with blame being leveled at multiple flops from its movie department. Camera sales dropped 6.9 percent, following the continued decline of video camera and compact point-and-shoots -- its imaging arm saw a total loss of $24 million. Meanwhile, TV sales are up, but despite the positive effects of cost reductions and restructuring, the division still lost $123 million in the last quarter. Meanwhile, Sony's own image sensors and components continue to make cash, following the continued boom in smart devices, with an operating income of $122 million for Q2 2013. Just ahead of its grand PS4 launch, the gaming department made a loss of $8 million, which (a little like Nintendo) it has blamed on "strategic price reduction" of its Vita handheld. It adds that this loss was "partially offset" by software sale increases on the PS3 (although not on the Vita). Sony still managed to sell 2 million new PS3s in the last quarter and it hasn't changed its predictions for the gaming arm. The company is expecting big things from the new PlayStation and a quick shift to profitability, pinning hopes on its content stores that are firmly lodged inside the next-gen console.
Strategy Analytics: Android claimed nearly 80 percent of Q2 smartphone share
Multiple analyst groups recently gave us a look at second quarter smartphone market share by the manufacturer. Today, Strategy Analytics is breaking down that market share by platform -- and it's clear that Google is still on a roll. Android jumped 10 points year-over-year to reach almost 80 percent of the world smartphone market during the spring quarter, hitting a record high. Some of this rise came at the expense of Apple, which dipped three points, but most of the casualties were in the "others" category led by BlackBerry and Nokia's soon-to-vanish Symbian. Microsoft can claim a small victory, though. Windows Phone climbed slightly to 3.9 percent of the market in Q2, giving it a level of influence not seen in three years. While we're not necessarily looking at the new status quo for the smartphone industry, it's clear that the days of neck and neck competition are behind us.
Nintendo reports quarterly revenue down, only 160,000 Wii U consoles sold
Nintendo has just revealed its consolidated results for the April-June quarter, and they show a significant 3.8 percent decline in sales compared to the same quarter last year -- despite (or perhaps because of) the release of the semi-next-gen Wii U. This console sold just 160,000 units during the quarter, or less than half the number of units shifted between January and March. The company's original sales projections for the device, and its hope of selling nine million units by March 2014, are now a distant dream -- we're looking at a lifetime total of just 3.61 million sales. On a more positive note, however, it still managed to sell a million Wii U games, and 1.4 million 3DS handhelds. In addition, the year-over-year fall in revenue was much smaller than the one Nintendo suffered in Q2 2012, and its operating loss was much smaller too -- just under five billion yen in the red. Factoring in all the company's various sources of income, it managed to eke out a net profit of 8.6 billion yen, or $88 million, so there's some life in this playful old outfit yet.
HTC: the One is selling better than last year's hero products, but next quarter may see a loss
HTC's unaudited results for Q2 2013 showed a sign of hope, but in today's call for the Q3 guidance, the Taiwanese company expects next quarter's revenue to be in the range of $1.67 billion to $2 billion, with an operating profit of anything from $0 down to... well, a margin of -minus 8 percent, which would equate to a horrible loss. This is also a notable drop from last year's $2.4 billion revenue and $168 million operating profit. CEO Peter Chou blames this decline on the higher cost structure (bill of materials and operating costs) and the clearance of aged inventory in the channel, but he hopes that Q3 will be the bottom in terms of HTC's profitability. CFO Chialin Chang added that his team has a few actions in place to help restore the company to profitability very soon.
Amazon hit by surprise loss last quarter, despite 22 percent rise in sales
The retail game is all about scraping a living out of tiny margins, and nowhere is that more evident than in Amazon's latest financial report. The company managed to grow revenue by 22 percent year-over-year between April and June, to $15.7 billion, and yet it confounded analysts' predictions by making a loss of $7 million, versus a $7 million profit in the same quarter last year. Then again, this knock has been attributed to the fact that Amazon is pushing to expand beyond the retail game, by investing heavily in its Kindle business, digital downloads and streaming products, as well as in building a bigger presence in China. This has been the strategy for a while, of course, and it's not the first time the company has been pushed into the red as a result. But Jeff Bezos says that Amazon's top ten bestselling products last quarter were all either Kindles, accessories for Kindles, or digital content for Kindles, which suggests the transformation is steadily having an impact, even if it's proving expensive.
Samsung's Q2 earnings show $6.96 billion net profit, but smartphone growth is slowing
Samsung has released its audited results for the second quarter, and the company is reporting a net profit of 7.77 trillion won ($6.96 billion.) That's plenty of cash and up from the same period last year, however it warned investors growth momentum in its mobile department may slow in pace. Of course, it's still growing, and sales of its Galaxy S 4 and Galaxy Note 8.0 contributed to a nine percent bump in quarterly revenue for the mobile department. Samsung plans to keep profits high by focusing on "offering differentiated smartphone displays...including flexible display technology" and lowering the cost of its OLED screens. In TVs, profits were also up on more demand for 60-inch+ sets as well as mid-range and low end versions. Samsung is also rolling out Ultra HD and curved OLED TVs in the US, while focusing on more mass-market designs in emerging markets.
Facebook reports $1.81 billion in revenue for Q2 2013, 1.15 billion monthly active users
Facebook saw its revenue grow year-over-year in its Q1 earnings reported in May, and that trend has continued for its second quarter. The company has just announced that it's pulled in $1.81 billion in revenue for Q2, beating analysts' expectations, while net income stood at $333 million. Of course, much of that money comes from ads: Facebook says that revenue from advertising now represents 88 percent of its total revenue, and that mobile advertising accounted for about 41 percent of its total advertising revenue for the quarter. Mark Zuckerberg highlighted that last bit in a statement, saying that "the work we've done to make mobile the best Facebook experience is showing good results and provides us with a solid foundation for the future." In other numbers, Facebook also reported that it has 1.15 billion monthly active users as of June 30th, while its daily active users stood at 669 million. Mobile users were again its biggest growth area, with 819 million users actively checking in on their mobile devices each month (up 51 percent compared to the same quarter in 2012), and 469 million active on a daily basis. We'll keep you posted on any additional developments that may come out of the company's earnings call in the next hour. Update: Zuckerberg and co. didn't have much additional news to offer during the earning's call, although he did comment briefly on Facebook Home, which he described as a "seed we're planting," and something to look at over the long term.
ARM sees more double-digit growth in Q2 2013, takes big hit from patent litigation
This UK chip designer is accustomed to steep growth in demand for its Cortex mobile processors, and although we've seen hints that it faces new challenges ahead, for now it's mostly all gravy. Revenue in Q2 2013 soared 26 percent year-over-year to £171.2 million ($264.3 million), while profit before tax was up 30 percent £86.6 million (in "normalised" terms). Mobile devices remain the largest market for the company, but embedded devices (including wearables, Raspberry Pi and printers) is the fastest growing segment, expanding by 25 percent in the last year. The future continues to look rosy for ARM, with new Samsung Exynos 5 chipsets arriving based on ARM's Cortex-A15 and Cortex-A7 cores in big.LITTLE configurations. The only hint of negativity in the earnings report was a huge expense of £41.8 million incurred by a patent attack from an unnamed "third party", which was probably MIPS (see More Coverage), and which contributed to a much lower IFRS profit of £15 million -- although this represents ARM's contribution to a "full and final settlement," which presumably means it's a one-off thing.
Google rakes in over $14 billion in revenue during Q2, increased ad revenue balances growing Moto losses
For the last several months Google's stock price has been surging, getting increasingly close to the $1,000 mark. And when monstrous revenues like this keep rolling in, it's easy to see why. In Q2 of 2013, the internet giant pulled in $14.11 billion in revenue, an increase of 19 percent year-over-year. Of that massive haul, almost all of it (93 percent) was generated directly by Google properties, most notably massive advertising networks -- $12.1 billion of its gross was thanks to advertising. Motorola's efforts equate to just less than $1 billion in revenues, but the $998 million it pulled in is not an inconsequential improvement over Q2 2012's $843 million. Even with that modest increase, however, Moto still posted an operating loss of $342 million. That's notably worse than the $199 million lost during the same quarter last year. While this wasn't a record setting quarter for Google, it's certainly not far off from its Q4 2012 mark of $14.46 billion, and marks a small increase sequentially. Net income also remained strong, with the Mountain View team pocketing $3.23 billion. Again, not a record high, but not far off from the $3.55 billion in Q1, and a pretty impressive jump year-over-year from $2.79 billion. While a significant chunk of Google's cash is generated here in the good ol' US of A, the international markets are still treating the company quite well. In fact, a full 55 percent of revenues ($7.2 billion) were earned overseas. While cost-per-click continued to decline for the company, by 6 percent from last year, the number of paid clicks was up more than enough to compensate -- an impressive 23 percent. And, should Google's fortunes suddenly turn, it has a war chest of $54.4 billion stashed away for a rainy day. We're listening in to the earnings call at 4:30 PM ET today and you'll find updates from that after the break.
Verizon smartphone revenue up in Q2 2013, half of all 7.5 million activations were iPhones (updated)
Verizon's latest quarterly report reveals a carrier chugging along nicely, thank you very much. Total revenue (including wireless and wireline) is up slightly to $29.8 billion, while wireless service revenue on its own grew by 8.3 percent compared to the same quarter last year. Nearly a million (941,000) new retail postpaid customers joined the VZW brigade, some of whom may have been drawn to the carrier's expanding LTE service, which is now available to 301 million Americans, as well as to new handsets like the Nokia Lumia 928 and possibly even the BlackBerry Q10 (or maybe not). In any case, those high-margin subscribers helped to increase profit by 14 percent -- so long as you're the kind of person who's content to be guided by "non-GAAP consolidated adjusted earnings per share." There's also no sign of the pension-related issues that affected the company last quarter, which leaves this carrier high and dry, regardless of how smartphone saturation may be affecting others along the food chain. Update: In its earnings call, Verizon added that 59 percent of traffic on its network is on 4G LTE, and 52 percent of its smartphone activations (around 3.8 million device activations) were iPhones.
Nokia reports smaller $150 million loss in Q2 2013, Lumia sales up to 7.4 million
After BlackBerry's disastrous earnings a couple of weeks back, Nokia and Microsoft have clear bragging rights over third place in the ecosystem war -- but does a bronze medal earn you any cash? The Finnish manufacturer has reported declining Q2 2013 revenues of €5.69 billion ($7.4 billion) compared to the $9.2 billion earned in the same quarter last year. The good news is that the huge financial losses of 2012 seem to be gone, with today's reported loss standing at just €115 million ($150 million), all of which can be laid at the feet of Nokia's devices and services division. Meanwhile, the company's smartphone sales seem to be growing thanks to fresh Lumia models like the 520, 620 and 720 -- with a total of 7.4 million Windows Phone 8 devices sold in the quarter. For context, that's significantly more than the 6.8 million units BlackBerry could boast in its latest report. It's also a big improvement on the 5.6 million in Lumia sales from Q1 and the 4.4 million sold in Q4 2012. However, the Asha division saw sales slip down from 5 million last quarter to 4.3 million now. Oh, and if anyone's still in the market for a Symbian handset, better be quick -- the company is reporting that sales of the phones are now "approximately zero." In other parts of the business, "Here," Nokia's renamed mapping division, lost €89 million ($116 million) while Nokia Siemens Networks made a slender €8 million ($10.4 million) profit. Looking forward, the company has said that it's lowering its future estimates by two percent, saying that dwindling demand, higher operating expenses and "the macroeconomic environment" will all help to erode the company's cash reserves. But hey, at least Microsoft's still kicking in that $250 million in alimony platform support payments.
Intel posts Q2 2013 earnings: revenue of $12.8 billion, net profit of $2 billlion
Intel just posted decidedly mixed results for the second quarter. While it largely matched its outlook from the first quarter with $12.8 billion in revenue and a healthy net profit of $2 billion, it also saw sharp year-over-year drops in revenue from some of its core divisions. The PC Client Group, which makes the brunt of Intel's processors, saw its revenue decline 7.5 percent; the Other Intel Architecture Group, which primarily handles mobile chips, faced a 15 percent drop. Intel hasn't explained the dip, although there are a pair of major factors at work. In addition to facing a very rough PC market, the company only launched its Haswell architecture late in the quarter -- there hasn't been much time for customers to buy the new chips. Intel says there's "strong acceptance" from early Haswell customers, however, and its outlook for the current quarter is slightly rosier as a result -- it expects to make the same $13.5 billion in revenue that we saw a year ago.
Yahoo announces Q2 2013 earnings: $1.13b revenue, $137 million income
The closing bell has rung, and Yahoo has released its earnings for the second quarter of 2013. What's the final verdict? Compared year-to-year over the same quarter last year, it's mostly good news for the company: GAAP income is at $137 million (up 150 percent), while GAAP revenue comes in at $1.13 billion (down seven percent). GAAP net earnings came in at $331 million, which is a 46 percent increase from this time last year, while non-GAAP came out at $386 million, a six percent jump. Not bad, given the number of acquisitions the company made this quarter -- nine, to be precise, including Tumblr. In terms of other highlights from the earnings report, search revenue fell by nine percent year-over-year, while display revenue went down 12 percent. Net earnings per share jumped up 68 percent to $0.30. Full press release is below the break for your perusal.
Foxconn's Q2 revenues hit $30 billion, up 0.6% year over year
Hon Hai, better known in the west as the iPhone maker Foxconn, seems to be doing just fine after allegedly losing some orders from Apple to competitor Pegatron in September 2012. According to Bloomberg, the company's second quarter revenues hit $30 billion, up 0.6 percent from the same quarter a year ago. That's far better than the 19 percent drop it experienced during the first quarter. While there's no guidance as to Q3 figures, we've got to think that an iPhone 5S can help fill those coffers.
Gartner and IDC: PC shipments dropped about 11 percent in Q2
If you were looking for a bounce-back in the PC market after a sobering first quarter... well, keep looking. Both Gartner and IDC estimate that shipments fell about 11 percent year-over-year in the second quarter. The two analyst groups blame the decline on sluggish uptake in a few regions, most notably China and Europe, as well as a market that favors tablets over low-end computers. It's easy to agree after seeing the numbers. Taiwanese PC makers like Acer and ASUS faced steep yearly declines as they switched their attention toward tablets and Ultrabooks, while even top-seated Lenovo took a small bruising. There's a silver lining to this cloud, however. Dell, HP and Lenovo all fared much better in the US than they have in recent quarters. Gartner and IDC attribute the resurgence to the corporate world, where the end of Windows XP support in 2014 may be pushing some upgrades to PCs running at least Windows 7. It's not quite the broader recovery that vendors are hoping for, but it may have to suffice when any help from Windows 8.1 and OS X Mavericks is months away.
HTC finances improve over last quarter, but show just $41.6 million profit in Q2 2013
Though HTC has fallen shy of the $65 million in earnings investors were looking for in Q2 2013, at least it's a marked improvement over last quarter's disaster. It managed to improve profits to $41.6 million from a mere $2.8 million last quarter, based on unaudited figures. Likely reflecting demand for the flagship One and HTC's ability to finally produce that handset in significant numbers, revenue also jumped to $2.4 billion -- that's bad in the sense that it's a 20 percent drop relative to the same quarter last year, but it's slightly better than the 33 percent year-on-year revenue shortfall we witnessed last quarter. Overall, these figures still pale in comparison to HTC's historical performance and there's no immediate prospect of things getting better. According to Reuters, the most serious problems occurred towards the end of the quarter, as sales for June swooned 26.4 percent versus Q2 2012 -- a trend that puts a lot of pressure on the little shoulders of the HTC One Mini.
Samsung's estimated Q2 2013 profits top out at $8.33 billion
Right on schedule, Samsung has released its earnings estimates for Q2 2013 ahead of its full announcement later this month. And, as you might expect, the company made a lot of money: a tidy profit of 9.5 trillion won, or $8.33 billion dollars, to be exact. Naturally, that record-setting number is due in no small part to the success of the Galaxy S 4 and a strong showing by its components division as well. Should the estimate prove perfectly accurate, Q2 2013 will have been a significant improvement over last quarter's $6.4 billion profit, and a massive $3 billion improvement over Q2 of 2012. Of course, we'll get to see its full slate of numbers come July 26th when the financials are officially revealed, but it's looking like Sammy's doing just fine.
Qualcomm Q2 2013 earnings: revenue up to $6.12 billion, profit reaches $2.07 billion
Qualcomm is having an easy time riding the growing wave of mobile devices. Case in point: its very healthy second quarter earnings. Revenue at the San Diego outfit climbed 24 percent year-over-year to $6.12 billion, while the chip designer's net profit grew a similarly brisk 17 percent, to $2.07 billion. The figures were respectively up a modest 2 percent and down 6 percent versus last quarter, but that's to be expected given the usual post-holiday lull. Qualcomm still shipped a more than ample 173 million units of its MSM chips, and it expects to return $431 million to shareholders for their trust. The company also has a rosy-cheeked vision of the future -- it expects its third quarter revenues and profits to climb by at least 25 percent and 14 percent each, even with shipments down to as little as 163 million. When Qualcomm is at the heart of the HTC One, many Galaxy S 4 models and the Optimus G Pro, there's a good chance the company is being realistic about its prospects.
Apple posts $9.5 billion net profit in Q2 2013: sells 19.5 million iPads, 37.4 million iPhones
Apple has been on a roll for, well, almost as long as we can remember. Basically since the debut of the iMac, the company has been riding a rocket ship back from the brink of irrelevance. The iPod, iPhone and iPad have all led it to post record quarter, after record quarter, after record quarter. Now we're in the second quarter of financial year 2013 and it doesn't appear to be slowing down much. The company posted $43.6 billion in revenue during the quarter and net itself a handsome profit of $9.5 billion. While those numbers do represent the slowest rate of growth Cupertino has seen in years, it's hardly the fall from grace that some analysts were predicting. Compared to the same time last year, revenues are up from $39.2 billion though net income has dropped from the Q2 2012 mark of $11.6 billion. Still, the company managed to move more iPhones and iPads than it did during that quarter, and the drop from Q1's holiday-boosted numbers isn't particularly alarming. In total it moved 19.5 million iPads and 37.4 million iPhones during the three months ending on March 30th, 2013. In Q1 those numbers were an admittedly more impressive 22.9 million and 47.8 million, respectively. But, compared to Q2 of 2012, things are still looking up from the 35.1 million iPhones and 11.8 million iPads shipped. Things are a little less rosy around its non-iOS departments, but we'd hardly say the company was in dire straits. Mac sales were more or less flat both sequentially and year-over-year, falling just under four million units. Meanwhile, the iPod continued its steady decline, moving only 5.6 million units. That's not only more than a 50 percent drop from last quarter, but a 27 percent drop from the same period last year. The biggest contributor to Apple's revenue stream continues to be the iPhone, but the iPad is gaining fast and income from iTunes and its other software offerings continues to grow at an impressive rate. While the first year-over-year drop in profits in almost a decade might give some investors pause, there's little cause for concern for the future of the company. Cupertino's healthy war chest now sits at $145 billion in cash, up from the $121 billion and change it had at the end of Q4 2012. We'll be listening in to the conference call at 5 PM and we'll update with any juicy tidbits after the break.
