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Let's talk AAPL and the future
It's been a roller coaster ride over the past two years for Apple (AAPL) stock. In December 2007 it hit a then-peak of $199.83 a share. Just two months later AAPL sunk to $125. Three months after that it had recovered to the $180s, but by November 2008, AAPL had plummeted to $82 a share. Since then, the stock has recovered and hit an all-time closing high of $207 on November 17, 2009. As of today it's sitting pretty in the $190s -- though some think the drop from the $200s to $190s is suspicious. I argue with people all the time why Apple didn't deserve its dips and plummets over the last two years: The company is sitting flush with $23.5 billion $35 billion in the bank, in cash (about the same as the total market value of another major US computer maker, named for its CEO and founder, who 12 years ago famously suggested shutting down Apple and giving the money back to shareholders). It has zero debt. It is one of the most respected companies on the planet and has the world's greatest CEO. But more importantly than the cash and its status, I believe AAPL is a great buy because it has such small market share in all the categories it operates in save one...
China Unicom's dismal iPhone sales
Two weeks into official iPhone sales, China Unicom has sold only 5 units* through the online retailer Taobao.com according to PCWorld. China Unicom sells iPhones through its own site, but doesn't share sales figures. Still, PCWorld reports, Taobao.com is the country's largest e-commerce site, and has a large iPhone section. What could account for the poor performance? The Golden Shield Project for one, which (among other things) prevents the sale of iPhones with Wi-Fi enabled. iPhones purchased outside of China do have Wi-Fi, of course. Another factor could be China's bustling black market. Despite the recent official release, the iPhone has been available in China for quite some time now. AppleInsider estimates that nearly 2 million iPhones are already circulating China, most of them jailbroken. Cost is another factor. For example, a contract-free 32GB iPhone 3GS costs 6,999 yuan (approximately US$1,024 as of this writing) in China, compared to about US$800 in Hong Kong. The news isn't all gloom-and-doom, however. AppleInsider reports that those who do purchase iPhones legitimately are flocking to the App Store. Still, the problem of getting more official iPhones into the hands of Chinese customers remains. *As of Dec. 3rd, 2009.
Ubisoft first-half profits plummet into loss
Among the comprehensive list of numbers in Ubisoft's first half fiscal 2009-10 report, measuring performance in April through September 2009, one figure stands out: the French company's reported €52,027,000 in not-profit. That's right, Ubisoft's profits are down by more than €70 million (over $100 million) from the same period last year to rest firmly in the red. From a profitable first half of fiscal 2008-09 of roughly €24 million to just over €52 million in losses in the first half of fiscal 2009-10, Ubisoft's profits have experienced a year-over-year change of -316.53 percent. However, CEO Yves Guillemot remains steadfast that projected sales figures for Assassin's Creed 2 and Avatar will ease Ubisoft's financial woes. This is, after all, the most important Q4 in the company's history.
Square Enix summons Earnings Report; Final Fantasy XIII Sales Projections evade attacks
Square Enix recently chose to attack with its annual earnings report, and among the 12-page PDF file's barrage of numbers, things look pretty good for the company. Net sales for the six months ending September 30, 2009 were up 33 percent over the same period last year to 91 billion yen ($1 billion), while operating income was also up by 39 percent to 13 billion yen ($144.5 million) over the same period last year. It's not all roses and Dragon Quest IX sales, however -- net income was down almost 58 percent to 2.7 billion yen ($30 million). The statement also talks about the acquisition and assimilation of Eidos in direct proportion to Square Enix's games group division -- which includes video games across all platforms and online games for personal computers. Through the aid of titles like Batman: Arkham Asylum, Kingdom Hearts 358/2 Days and the aforementioned Dragon Quest IX, the games division rose its net sales and operating income by 117 percent and 63 percent to 4.8 billion yen ($53 million) and 1.0 billion yen ($11 million), respectively. As for the company's upcoming darling, Final Fantasy XIII, Square Enix prez Yoichi Wada spoke about concern regarding the title's projected domestic sales. Basically, he's not concerned at all! "PS3 sales continue to increase. We're bundling PS3 and FFXIII, and can expect even further sales increases. Orders for FFXIII are definitely not bad," he said. While he didn't reiterate anything as bold as six million, Wada did claim that the game is expected to sell in the millions. Source - Square Enix earnings (PDF) [Via andriasang] Source - Wada comments on FFXIII sales
Activision-Blizzard makes lots of money, no update on Blizzard earnings
Activision-Blizzard has released their third-quarter numbers for the financial year of 2009, and as you might expect for the company in charge of Call of Duty, Guitar Hero, and World of Warcraft, business is brisk. They were expecting to bring in around $700 million, and ended up pulling in around $50 million more than that. It's good, we guess, to be the king. Blizzard, in particular, laid claim to three of the top five selling PC games in North America on the good side, and on the bad side, Activision acknowledges in the press release that they're happy to have WoW back online in China, but a little worried about the troubles it's seen over there lately. Strangely enough, there is no information in the earnings about how much money World of Warcraft has pulled in for the company, or any updates about subscriber numbers. Usually, that gets at least a mention, so maybe, with subscribers certainly down in China, Activision-Blizzard wants to keep that under their hat for now.
2009 THQ year-to-date sales up 22 percent over 2008
THQ has released its financial results for the second quarter of its fiscal 2010, which ended September 30, 2009, and things are mostly looking up. The company lost money this quarter compared to the same period last year, posting non-GAAP net sales of $100.38 million, down from $151.62 million during Q2 of its fiscal 2009. However sales are up for the entire year, with THQ posting net sales of $334.28 million for its fiscal 2010 thus far, up from $272.69 million last year, a 22 percent increase. THQ blamed the second quarter dip on a lack of new titles, though it hopes to have a good holiday season thanks to a "strong mass-market line-up" including WWE Smackdown vs RAW 2010 and MX vs ATV Reflex. The company was also sure to mention its triumph in the JAKKS Pacific lawsuit, which resulted in a much lower payment to the longtime WWE series developer (though the scuffle is still haunting the publisher). Finally, THQ promised to prevail in its march to profitability by the end of fiscal 2010. Though the company expects its Q3 2010 to be 5-10 percent lower than the same period last year, it predicts Q4 sales will exceed those of last year. A reasonable hope, given that all of THQ's major releases drop in its fiscal Q4, including Darksiders, Metro 2033 and the Dawn of War 2 expansion, Chaos Rising.
Microsoft's layoffs conclude early, over 5,000 let go
With this morning's confirmation from Microsoft that another 800 people have been let go, the layoffs that began all the way back in January of this year have completed. Affecting everyone from Games for Windows Live to Rare to a quarter of the Massive team, we're sure that the folks still working at The Big M are glad that pendulum blade has stopped swinging above their heads. "We are eliminating around 800 positions ... and have completed our reduction plan sooner than we had anticipated," the company said in a statement to PaidContent. Unfortunately, as with any business in a down economy, the statement also notes that "continuing to manage our businesses closely ... can mean additional headcount adjustments." Considering a company representative already told TechFlash that more than the announced 5,000 number had been let go over the last 10 months (though no specifics were detailed), we're wondering just how many more people will be affected by "headcount adjustments." We contacted Microsoft for more information, but were given the same statement that PaidContent received. It's been reprinted in full after the break.
Square Enix's expected FY09 earnings hit for $55M damage
Square Enix predicts ¥7.5 billion ($82 million) net earnings for April 1 through September 30, 2009MISS!Eidos Buyout attacks Square Enix!Taito Retirement Program attacks Square Enix!Square Enix Retirement Program attacks Square Enix!Square Enix net earnings for April 1 through September 30, 2009 hit for ¥4.9 billion ($54 million)!Square Enix predicts ¥15 billion ($164 million) net earnings for fiscal year 2009MISS!Square Enix predicts ¥10 billion ($109 million) net earnings for fiscal year 2009SUCCESS!Square Enix earned 100 XP!Square Enix found the following items!HUMBLE PIE x1
Capcom posts strong Q2 2009 earnings, despite 'soft' overseas sales
Capcom has posted its financial results for the six months ending September 30, 2009, and things are definitely looking good for the company. The publisher reported net sales of ¥38.892 billion ($426 million), up from ¥31.236 billion ($342 million) during the same period last year, which amounts to a 24.5-percent increase. The majority of those sales were generated by Capcom's home video games division, which pulled in ¥27.748 billion ($303 million) -- up from ¥16.486 ($180 million); a staggering 68.3-percent increase. Capcom credits strong sales of Monster Hunter Tri in Japan, as well as continued sales of Resident Evil 5, Monster Hunter Freedom Unite and Ace Attorney: Investigations to its recent financial success. However, the company stated that overseas sales remained "soft" for the period thanks to the delay of Dark Void and the weak performance of Bionic Commando and Monster Hunter Freedom Unite. Joystiq readers will recall that Capcom leveled complaints at the same games in its first quarter report earlier this year. It's worth noting that overseas sales still amounted to ¥11.739 billion ($128 million), which accounted for 57-percent of the home video games division sales. We suppose Capcom might consider that "soft," but the suits can't be too broken up about it. Source -- Capcom | Favorable Financial Results for the 6 months ended September 30, 2009 Source -- Capcom | Consolidated Financial Results for the 2nd Quarter of the FY2009
Nintendo half-year results show profits down in '09; still making boffo bucks
Nintendo's profits took a 52 percent dive in the first-half of 2009 compared to the same period last year, which sounds horrible -- until the realization hits that the company still brought in $766 million in pure profit. Yes, Nintendo is still doing all right, even as it cut its profit forecast for the fiscal year ending March 2010 from $3.3 billion to merely $2.53 billion. Tragic, we know.The Wii has now sold 56.14 million units globally, while the DS has reached 113.48 million in unit sales. There's been a general slowdown of software sales, however, as the House of Mario has had fewer high-profile releases so far this year -- we count only: Wii Sports Resort. Although investors may see the profit decline as a bad thing, it's not like Nintendo's plump plumber is going to be forced to cut back on those hearty meals any time soon.Source -- Nintendo financial report [PDF]Source -- Nintendo profits slide (MCV)
Nintendo profits sink on declining console sales, weak game selection
Oh how the mighty have fallen. Nintendo just announced that its interim net profit was cut by more than half to ¥69.49 billion (about $770 million), from ¥144.83 billion last year at this time -- figures that won't be helped by the cheaper Wii price tag announced at the end of September. Speaking of which, Nintendo sold only 5.75 million Wii consoles from April to September (down 43% from last year) and cut its full year sales forecast for the April 09 to March 2010 period to 20 million units, down from an expected 26 million. DS sales were also off 15% from last year and we doubt that a bigger screen on the new DSi LL model will change that dramatically.
Xbox division a bright spot on Microsoft's quarterly report
Despite a year-over-year dip in both revenues (14%) and net income (18%) for the company as a whole, Microsoft's Entertainment and Devices Division – which houses the Xbox, Games for Windows, and Zune brands, amongst others – nearly doubled its operating income in the period ending September 30, thanks to "decreased Xbox 360 platform costs," meaning console production costs. The company reports that "EDD revenue was flat with growth in Xbox 360 platform and PC game revenue offset by decreased revenue from the non-gaming portion of the business" (think: Zune, Windows Mobile). Even with "decreased revenue per console resulting from price reductions during the past 12 months," Xbox 360 platform and PC game revenue increased by 8% "due mainly to increased revenue from Xbox Live and Xbox 360 video games." While the 2.1 million Xbox consoles shipped for the quarter just misses the 2.2 million mark from last year, those reduced production costs help. With the Xbox sharing top billing with Microsoft's flagship money maker, Windows, on the earnings announcement – both "exceed[ing] expectations due to strong consumer demand" – it seems that Microsoft finally has a consistent hit on its hands. Now, let's talk about accessory pricing ... Source – Microsoft Reports First-Quarter Results Source – Xbox Division Doubles Profit in Q1
Microsoft first-quarter income down 18 percent, still beats expectations
Microsoft just turned in its first quarter financial report card, and while the good vibes around Windows 7 launch haven't yet begun to fade, the numbers here aren't exactly cheery: revenue is down 14 percent from last year at $12.92b, operating income is down 25 percent at $4.48b, net income is down 18 percent at $3.57b, and earnings per share are down 17 percent at $0.40. Not wonderful, but it's better than analysts were expecting, and the stock is actually way up on the news. Adding in the deferred revenue from early sales of Windows 7 makes things look a little better still, with only a four percent decline in revenue and an eight percent increase in earnings per share, and the Entertainment and Devices Division -- home of the Xbox 360 and Zune HD -- is also a bright spot, increasing income from $159m to $312m on essentially unchanged revenue. Of course, the big test will actually be next quarter, after Windows 7 has really had a chance to make an impact -- we'll see if all these warm fuzzies translate into cold hard cash.
Apple press release: FY 09 Q4 earnings
Apple has just released the fourth quarter earnings report for fiscal year 2009. The report can be read here and will be discussed in detail on the upcoming earnings call with Wall Street analysts. The big news? Apple once again beat the Street with $1.82 EPS against an expectation of $1.65 EPS! More good news will be coming soon. Also big news: "Apple sold 3.05 million Macintosh® computers during the quarter, representing a 17 percent unit increase over the year-ago quarter. The Company sold 10.2 million iPods during the quarter, representing an eight percent unit decline from the year-ago quarter. Apple sold 7.4 million iPhones in the quarter, representing seven percent unit growth over the year-ago quarter. " Be sure to join in on our liveblog of the call, coming up at about 4:50 PM EDT today.
Nokia posts $834 million quarterly loss, smartphone share down to 35%
Nokia just posted a net loss of 559 million euro (834 million dollars) for the third quarter -- its first quarterly loss in a decade according to the AFP. The loss comes after a reported 20% drop in sales and 1.17 billion euros in write-downs, mostly for impairment charges on Nokia Siemens Networks. Nokia also said that its smartphone market share dropped to 35% versus 41% in the previous quarter. With fierce competition from Apple and RIM, and Palm just launching its Pre into Nokia's European stronghold, well, it's a good thing Nokia's branching out into untapped markets like single-core Atom-based netbooks. Read -- Smartphone slip Read -- First loss in a decade Read -- Nokia Q3 statement
Standards board changes subscription accounting rules, Apple CPAs drunk with power
We'd heard Apple was pushing the Financial Accounting Standards Board to change the rules by which Cupertino's accountants reported iPhone and Apple TV revenue, and it looks like the effort was successful. The new rules allow Apple (and other companies like Palm) to report revenues on products that bundle hardware and software all at once, instead of parceling out the revenue over time using subscription accounting to enable free software upgrades. For investors, that means Apple's quarterly earnings reports will more accurately reflect the state of the company's cash flow, but we're more interested to find out if this means iPod touch OS updates will be free now, since the previous rationale for charging was that iPod revenue wasn't recorded using subscription accounting. We've got a feeling Apple's all too happy to take your $4.95, but we can hope, right? [Via MacRumors]
UK retailer GAME sees big boost from used game sales
Even though the economy has seen better days, UK brick-and-mortar retailer GAME is seeing growth. Its used games revenues in the first half of this year ending July 31 grew by a whopping 12.3 percent to now make up "25.7% of total sales," paralleling US retailer GameStop's yearly used game revenue percentage. But things aren't all Ferrari 458 Italia-filled days and caviar dreams around GAME HQ, with total sales dropping by seven percent."In the second half, the installed base of third generation consoles will continue to build ... price reductions on the Microsoft Xbox 360 Elite and Sony's new model PlayStation 3 are helping to stimulate the market for hardware, chairman Peter Lewis said in the financial results announcement. If you add to that the recent speculation of a Nintendo Wii bundle hitting UK store shelves this holiday as well, we imagine the market will get plenty stimulated, Mr. Lewis.[Via GamingIndustry.biz]
Jagex comes in 22nd on the Sunday Times Tech Track 100 list
With the hugely successful RuneScape in their stable, we've known that Jagex has been doing well for a long time now. They've already been recognized outside of the immediate gaming world on numerous occasions: Guiness World Records awarded RuneScape the title of the world's largest free-to-play MMO, and in 2008 the word RuneScape was typed into Yahoo! Search more than Lindsay Lohan and Naruto. The company's latest accolade comes via the Sunday Times Tech Track 100, where they were just ranked at number 22 on the list of the fastest growing private technology companies in the UK.The Tech Track 100 report states that Jagex's sales have grown 84% a year for the last few years, from £5.2 million in 2005 to £32.3 million in 2008. This is the first time they've made it on to the list since the company was founded in 2001. Jagex CEO Mark Gerhardt made a statement about his company's achievement, sounding particularly proud (and rightly so): At Jagex we are passionate about the games we make and the technology we have created to develop and deliver our games; creating fun is just part of our DNA. Our values and passion have allowed us to grow one of the largest player communities in the world." The full Tech Track 100 list is available online in .pdf form.[Via GamesIndustry.Biz]
Palm announces first quarter results: $164.5m net loss, 823k phones sold
Palm just announced its first quarter results -- the first to really include numbers from the Pre -- and they're positive (well, depending on how you look at things), with a $2.8m gross profit on $68m in revenue. Actually, that's a little low, since Palm uses the same sort of subscription accounting for the Pre as Apple does for the iPhone, so the unofficial numbers are higher: $100.6m gross profit on $360.7m in revenue. Still, we should point out that according to GAAP (you know, the rules that matter), the outfit had a net loss in fiscal Q1 2010 of $164.5 million, while the non-GAAP net loss was pegged at $13.6 million. Although Palm wouldn't include break out specific sales data, they did say that the "vast majority" of the 823,000 phones they sold in Q1 were Pres, so take that as you will. Oh, and if you were still holding out hope for more Palm WinMo phones, it's all over -- Palm is doing 100 percent webOS development from now on. (Shocker!). Update 1: Rubinstein deftly sidestepped the question of why Pixi was launched on Sprint as opposed to another carrier, saying "They're a great partner and we're looking forward to a great holiday season." Update 2: Asked about MOTOBLUR, Jon said "I don't know much about MOTOBLUR, but I think to build really great products, you have to control the entire experience -- you have to own the OS and the services around it." Update 3: Jon just said "We're on a web schedule with updates -- you'll see a steady stream of updates and features." Update 4: Revenue on accessories and anciliary products were "really very small, immaterial to overall trends." When pressed if it was in the low, single-digit millions, CFO Doug Jeffries emphasized, "very, very small."
Apple pushes to change subscription accounting rules
Apple's pretty famous for using subscription accounting for the iPhone and Apple TV as a way to bend the rules and offer free software updates after purchase -- basically, instead of putting all the money from the sale on the books at once, the company's accountants spread the revenue out over two years, extending the "transaction" to cover upgrades. That's great for iPhone owners, but it's not so great for Apple or its investors, since the company's stock price doesn't always reflect the true amount of iPhone money coming in -- in fact, Apple earnings reports now include a second, unofficial balance sheet that does away with subscription accounting to show off the real numbers. Yeah, it's confusing, but it might finally be about to change, since the Financial Accounting Standards Board just tentatively approved new rules that could allow Apple to do away with subscription accounting and still deliver free updates. That means Apple's quarterly earnings will now feature much larger official revenue and profit figures -- last quarter's official revenue was $8.34 billion, while the unofficial number was $9.74 billion -- the lawyers and accountants will be happy, and we'll still get free iPhone updates. Good deal all around -- except for iPod touch owners, who will still have to pay $9.95 and not get a camera. [Via Yahoo]
