financial
Latest
Nintendo is finally making money again
Nintendo recorded its first annual profit since 2011 today. Its final results for 2014 (technically April 1st 2014 to March 31st 2015) reveal a $207 million operating profit on $4.6 billion in revenue. That's nothing to write home about, and way lower than initially expected, but still represents a dramatic improvement from previous years' consecutive losses. The past three months have actually seen a pretty heavy negative swing for Nintendo, with the international launch of new-and-improved 3DS models failing to make much of an impact, and the Wii U continuing to languish in 3rd place behind the PS4 and the Xbox One.
Google eyes the bigger picture while missing Wall Street's expectations
It's earnings time once more, and Google's gone and done it again. Despite taking in $17.3 billion in revenue over the past three months (that's a 12 percent lift over how much it made this time last year), the search giant still managed to whiff slightly when it came to pleasing Wall Street's persnickety analysts. If you've been paying attention the these earnings releases (dry though they may be), none of this will be news to you. Google's track record over the past few years is filled with more Wall Street misses than hits, and this'll be the company's sixth consecutive whiff. But does Google care? Yeah, no.
Venmo finally gets more secure with two-factor authentication
If you're the type who uses Venmo to pay your buddies back for artisanal cupcakes, congratulations: You're a little bit safer now. Venmo announced the other day that it was rolling out a new two-factor identification feature -- when the service detects a login from a new device, it'll send you an email and a 6-digit pin to your phone so you can prove everything's on the up and up. That might sound like a no-brainer for a financial services company that's (thanks to back-to-back acquisitions) part of eBay's payments empire, and you know what? It absolutely is. The only thing more shocking than Venmo not having something like this in the first place is how long its taken to implement.
'Super Smash Bros.' and exchange rates help keep Nintendo in profit
Nintendo's slow and arduous journey back to financial prosperity continued today with the release of its latest financial results. The company posted a second consecutive quarterly profit in its financial Q3, which counts sales from September through to December. Revenue was 271 billion yen (roughly $2.3 billion), generating a profit of 31.8 billion yen (around $270 million). A large part of the company's profits can be attributed to a weak yen, which dramatically increases the value of North American and European sales when converted to Japanese currency. Though the figures are generally pretty healthy, it's worth noting revenue for the holiday quarter dropped by around 13 percent year-over-year, something that will have a serious knock-on effect on the company's finances for the financial year. Why the slide? Well, Wii U sales were down slightly yearly -- 1.91 million consoles versus 1.95 million the year earlier -- but this drop was easily offset by software gains. Nintendo moved 11.2 million Wii U games in Q3, its best results since the console launched in 2012. Key to this success was Super Smash Bros. for Wii U, which sold around 3.4 million copies since late November. So for once, it's not the Wii U's fault. No, instead, the under-performer this quarter was the 3DS family of handheld consoles.
Apple CEO Tim Cook made $9.2M in 2014; board member Drexler retiring
It's not a big surprise, but Apple CEO Tim Cook isn't exactly a poor man. In the company's filed SEC Schedule 14A, it was disclosed that Cook pulled in a cool US$9,222,638 in compensation last year. Of that amount, $1,748,462 was his salary, non-equity incentive compensation was $6,700,000, and another $774,176 in "other compensation" added to the total. That total was over double the $4.3 million Cook made in 2013, but considering Apple had a record year, he definitely earned it. There were some big paydays for other Apple execs as well. New hire Angela Ahrendts, the senior vice president of retail and online stores, pulled in over $70 million in stock awards. $37 million of those awards were to compensate Ahrendts for unvested awards of stock at her previous employer - Burberry - and a nice lump sum of $33 million as a new hire at Apple. I'd venture that every Apple new hire would love a stock award of $33 million... or even just a $33,000 bonus. Senior VP of internet software and services Eddy Cue also nabbed a large stock award of over $20 million, as did operations senior VP Jeff Williams. In other news, longtime Apple board member and former president and CEO of The Gap, Inc. Millard "Mickey" Drexler will be stepping down from his role on the board in March of 2015. Drexler is 70 years old, the oldest Apple director, and has served on the board since 1999. Apple has not yet nominated a replacement for Drexler. Remember that Apple's Q1 2015 earnings call is coming up on Monday, January 27 at 5 PM ET. We will be bringing you news of the company's fortunes for the first fiscal quarter of 2015, as well as providing a liveblog of the earnings call.
FFXIV, FFXI, and Dragon Quest 10 subscribers total(ed) 'nearly' 1M
Square-Enix has released its summary of 2014's finances with the start of the new year, and the good news is that it looks pretty rosy. According to the summary of the financial year that ended in March of 2014, the company's fortunes had improved immensely. Of more specific interest to the MMO market, of course, is the fact that the report gives some idea of the subscribers for Final Fantasy XIV, Final Fantasy XI, and the currently Japan-only title Dragon Quest X. According to the report, all three titles together boasted "nearly" one million subscribers, with the lion's share likely belonging to Final Fantasy XIV. Specifics are not discussed, nor does the report clarify whether these subscriber numbers are from the end of the financial year in March or the end of the calendar year in December (we assume the former). The most recent official word from Square-Enix was 2.5 million registered accounts for FFXIV in December 2014.
Apple bought back $56 billion of its own stock in 2014
Apple is no stranger to stock buybacks so its no surprise that the trend continued in the 2014 fiscal year. And how much stock did Apple buy back this year? According to a new report for FactSet, Apple spent over $56 billion buying back stock this year. That's $36.8 billon more than IBM who took the second for most spent on buybacks with $19.2 billion. Stock buybacks have been good for Apple. So good that this year Apple also earned itself first and second place for the top two buybacks quarters since FaceSet started tracking the S&P 500 in 2005. First place goes for the $18.6 billion bought back in the first quarter, almost as much as IBM bought all year, while second place comes from the fourth quarter's $17 billion buyback. In March of this year the company spent more money buying back stock than Google generated in revenue. Apple's buyback program started in 2012, and has grown every year since. This past April CEO Tim Cook had dinner with activist investor Carl Icahn to discuss the "magnitude" of the company's buyback plans. If this year's numbers are any indication Icahn made a convincing case.
Instagram is now worth 49 times what Facebook paid for it
Many baulked when Facebook head Mark Zuckerberg agreed to drop $1 billion on Instagram in April 2012. "That's $33 per user," said some; "there's no business model!" screamed others. Less than three years later and Citigroup now says Instagram is worth $35 billion. That's almost 49 times higher than the $715 million Facebook ended up paying after its stock price fell, and considerably higher than rivals Twitter and LinkedIn. How did things go so right?
Perfect World's Q3 results down
Perfect World's third quarter profits fell, according to a financial results document published yesterday by the free-to-play giant. CEO Robert Xiao blamed PW's American operations for the drop, though he said the firm remains "confident in the long-term prospects of our US subsidiary given its strong R&D and operational capabilities as well as [its] promising pipeline." Perfect World declined to comment on the performance of Neverwinter's Q3 console launch. It did note that it is localizing the fantasy MMO for China, where the company has seen its concurrent user numbers drop from 778,000 to 623,000 inside of a year.
Activision Blizzard resolves class action lawsuits
When Activision Blizzard bought itself to be freed from Vivendi, there was no shortage of unhappy shareholders, leading to several class action lawsuits filed against the company and other attendant actors in response to the whole process. Those suits have now been resolved and the case is now closed; the parties have settled out of court, with the proposed settlement seeing some of the defendants paying a total of $275 million to Activision Blizzard as well as multiple insurance companies. The Board of Directors wrote in a statement that "the transaction, structured through the efforts and significant personal investment of Bobby Kotick and Brian Kelly, has contributed to the creation of over $3 billion of value for shareholders" and that they are "pleased to be able to put this matter to rest." Adjustments have also been made to said Activision Blizzard board of directors and aspects of the corporate structure, with the company paying all legal fees of the plaintiffs. Since multiple defendants were involved in the suit (including Activision Blizzard itself), it's still unclear exactly who took the hit for this particular lawsuit, but it does mean that the matter has been resolved to everyone's satisfaction.
NCsoft's third quarter report is glowing; WildStar's revenues are not
NCsoft's unaudited third quarter 2014 financial report is in. Do you want the good news first or the bad? Let's get the bad out of the way. WildStar's revenues plummeted between the second and third quarters, down 42.9% (the sales units in the table above, please note, are in millions of Korean Won). Variable expense, NCsoft wrote, also fell "largely due to decreased box sales of WildStar." Guild Wars 2's revenues also fell slightly over the quarter, down 8.5%. But the good news is that global sales and operating profit are very much up, up, up in total quarter-over-quarter and year-over-year, thanks primarily to the continuing popularity of Aion and classic Lineage.
Sales, income down in Capcom's Q2 financial report
Capcom's Q2 financial results remain gloomy, with net sales down by 51.3 percent and operating income down by 41.6 percent over the same period in 2013. This marks the second consecutive quarter in which the Street Fighter publisher posted declining sales. The culprit, Capcom believes, is a lack of any major releases during the period. Ultra Street Fighter 4, Dead Rising 3 and Phoenix Wright: Ace Attorney Trilogy all "posted steady sales," but without a major new product Capcom has only these relatively dated games to rely on. Capcom's arcade division wasn't much help, either. Net arcade sales dropped by 11.7 percent "due to the decentralization of the entertainment industry, a lack of products that attract new customers" and a shrinking market for those arcades that still exist. Despite all of this, Capcom remains optimistic that it will reach its earlier projections of net sales totalling $740.3 million by the end of the 2014 fiscal year. [Image: Capcom]
Twitter's doing well now, but its growth days might be numbered
By all accounts, Twitter's doing what it's supposed to: coaxing more people into using its high-speed social snark service... just maybe not as fast as some would like. According to Twitter's third quarter financials -- in which the company met or exceeded most milestones Wall Street types were hoping for -- 13 million people started using the service over the past three months, bringing the total to a whopping 284 million monthly active users. Not too shabby, right? That's up pretty substantial over last year, too. The potentially hairy issue is that Twitter brought 16 million people onboard last time it dropped numbers, and 14 million the time before that. Couple that with the fact that Twitter expects to rake in slightly less money next quarter than analysts expected, and you've got more than a few people concerned that Twitter's growth is winding down.
Carl Icahn's open letter to Tim Cook
Activist shareholder and invstor Carl Icahn is back at work poking at Apple, this time in a letter to Tim Cook published on the Shareholders' Square Table website. The short version? "Dear Tim, Remember all of those shares of Apple stock I bought? Speed up your stock repurchase plan by buying them back from me." Of course, there's much more than that to the letter from Icahn, his son Brett Icahn, and David Schechter. For example, a breakdown of how each Apple product line is performing both now and how Icahn expects the products to do in the future, as well as forecasting that Apple will get into UltraHD Television in FY 2016. Icahn goes so far as to forecast that Apple's going to sell "12 million 55" and 65" TV sets in FY 2016 and 25 million in FY2017". That should make Piper Jaffray's Gene Munster ecstatically happy. So why the interest in the company's future fortunes? Icahn makes his case that Apple stock is currently undervalued - the price of a share of Apple today was just over US$101, and Icahn thinks the company is actually worth about double that: $203 per share. And what he's doing is asking Apple to buy back his shares, of course at a premium over the current market price - that's what a tender offer is. Icahn, who owns 53 million shares of AAPL, would like for Cook to communicate "to the rest of the board our request for the company to make a tender offer, which would meaningfully accelerate and increase the magnitude of share repurchases." This, of course, will benefit Icahn hugely: "We feel compelled to do so because we forecast such impressive earnings growth over the next few years, and therefore we believe Apple is dramatically undervalued in today's market, and the more shares repurchased now, the more each remaining shareholder will benefit from that earnings growth." The letter is well thought out, peppered with statements from Wall Street analysts, and optimistic about Apple's fortunes for the future. But there's a bit of "we know better than you" snarkiness throughout, ending with "To be totally clear, this letter is in no way intended as a criticism of you as CEO, nor is it intended to be critical of anything you or your team are doing from an operational perspective at Apple. Quite to the contrary, we could not be more supportive of you and your team, and of the excellent work being done at Apple, a company that continues to change the world through technological innovation." So why tinker with a finely-oiled machine? Because Icahn can easily help his 53 million shares gain value just by publishing a "friendly letter" like this. It will be fascinating to see what response, if any, is forthcoming from Cupertino.
Funcom's revenues decrease in Q2
Funcom has released its second-quarter financial results for the year, and it's not a glowing success story. Revenue dropped roughly $600,000 compared to Q1, a drop attributed to weaker in-game item sales over the quarter. Despite this, the report indicates that the company remains on-track as a whole, with the overall pattern of expenses not significantly changed. All of the major MMOs in the studio's portfolio are stated to be cash-flow positive, which is good news for fans. While the company launched several marketing attempts to draw more players into its titles, The Secret World was the most successful at bringing in more players via its most recent major update. The company projects good results for LEGO Minifigures Online when it releases in October. Interested players can look at the full report, which is less overwhelmingly positive than might be ideal but hardly paints a picture of doom.
UK regulator proposes crackdown on misleading Facebook and Twitter ads
While Twitter and Facebook are enjoying returns from their native advertising platforms, it's still not easy to tell if a tweet or status update is actually a company trying to sell you something. It's a practice that the UK's Financial Conduct Authority (FCA) has become increasingly aware of, so it's begun consulting opinion on whether it should enforce stricter rules on promotional messages shared by financial firms. Blogs, social networks and photo and video services are all in the FCA's crosshairs, as it looks to crack down on companies that rely on misleading messages like "Join us now and we promise you'll make a 758% profit on your first stock investment" to sign up new users.
Apple announces Q3 2014 earnings results
Apple today announced its financial results for the third quarter of fiscal year 2014. Speaking to CNBC, Apple CEO Tim Cook said he "couldn't be happier" with the results, adding that "this is the best execution of any quarter since I've been at Apple." Apple posted quarterly revenue of $37.4 billion and quarterly net profit of $7.7 billion with an EPS of $1.28 per diluted share. Last year's results for the same quarter were $35.3 billion with a net profit of $6.9 billion, or $1.07 per diluted share. Gross margin for the quarter was 39.4 percent, as compared to 36.9 percent in the year-ago quarter. International sales accounted for 59 percent of the quarter's revenue. Apple sold 35.2 million iPhones, 13.3 million iPads and 4.4 million Macs in the third quarter of 2014. This represents a 12 percent climb in iPhone sales from the 31.2 million reported in Q3 2013 and a 9.2 percent drop in iPad sales from 14.6 million during the same quarter last year. Mac sales showed the steepest rise, climbing 18 percent from 3.8 million in Q3 2013. This financial report only scratches the surface of Apple's earnings for the quarter. For additional details, please join us at 5 PM ET / 2 PM PT for our liveblog of Apple's Q3 2014 earnings call.
8-month-old iPhone 5s outselling Samsung's flagship Galaxy S5
The walls may be starting to close in on Samsung bit by bit. Not too long after the company announced that profits declined by 24% during the past quarter comes a research report from Counterpoint which found that the eight-month-old iPhone 5s sold more units in May than the recently released Samsung Galaxy S5. Reuters reports: Research firm Counterpoint's survey of 35 markets accounting for nearly 90 percent of global sales found that sales for the eight-month-old iPhone 5s stood at 7 million in May, compared with about 5 million for Samsung's flagship Galaxy S5, which was in just its second full month of sales after a late March release. Looking ahead, the future looks even less rosy for Samsung on the smartphone front. The company has historically failed to incorporate any compelling features into its flagship Galaxy line to sway iPhone users to switch. What's more, the one lingering advantage of Samsung smartphones -- larger displays -- may be completely neutralized once Apple's next-gen iPhone is released. What's more, iPhone users are much more likely to stick with the iPhone than other smartphone owners are likely to stay with their current handset. Over time, this proves advantageous for Apple even if they currently have a lower marketshare count than competitors. Furthermore, while Apple has impressively been able to shield the iPhone from the perils of commoditization, the same can't be said for the vast array of Android handsets out on the market.
Report: China pushing banks to abandon American hardware
There's a growing undercurrent of tension between the US and China because both countries think the other is trying to hack them. They're both probably right, but China seems to be taking some concrete fiscal steps to make its displeasure known. According to a new report from Bloomberg (and the usual spate of unnamed sources), the Chinese government is quietly asking the country's big banks to give up their IBM servers in favor of some homegrown hardware.
Funcom secures $1.6 million in additional equity
Funcom's website has published news of a move that gives the firm $1.6 million of additional equity as it prepares to launch LEGO Minifigures Online. In May of 2012, Funcom reached an agreement with US fund manager Yorkville Advisors and is now partially exercising the resulting option. "We are very pleased to have increased the company's financial flexibility with funds that will be used in preparing for the launch of LEGO Minifigures Online," explained CEO Ole Schreiner explained in a prepared statement. "We have several times expressed a need for additional equity and have considered different alternatives to secure this. This facility has been available to us since 2012, but the timing has not been right before."
