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Lenovo nearly doubles net profits in Q1 earnings report, not so certain about 'mainstream' Ultrabooks by end of year
Lenovo's enjoying a bright and sunny Thursday in Hong Kong today, where the company has just unveiled a Q1 2011 / 2012 earnings report that's full of rosy news. According to the report, Lenovo's revenues jumped to $5.92 billion during the fiscal quarter, representing a 15 percent increase over last year's figures, while net profits nearly doubled to $108 million (compared to $54.9 million last year). Global PC sales, meanwhile, nudged upward 23 percent -- even at a time when most other manufacturers are seeing relatively sluggish growth. During an earnings conference call this morning, COO Rory Read provided a little insight into his company's approach to the growing Ultrabook sector, while hinting at future price reductions. Speaking to reporters, Reed assured that Lenovo would "invest in innovation to be a leader" in the Ultrabook market, adding that prices for its MacBook Air competitors may reach "mainstream" (sub-$1,000) levels by 2012: "I wouldn't say by the end of the year necessarily but...that's definitely going to happen." Head past the break for Lenovo's financial summary, along with the full PR. [Original photo by Cory Grenier]
ChangYou reports impressive profit and revenue gains
It's been a great year for ChangYou, and the Chinese developer responsible for Tian Long Ba Bu and Duke of Mount Deer recently reported its fifth consecutive double digit growth quarter. Tian Long Ba Bu has seen two successful expansion packs thus far in 2011, with a third scheduled for September. According to Gamasutra, Duke of Mount Deer recently increased its server headcount to 110 (up from 64), and the success of both titles powered ChangYou's $54.2 million profit as well as a 35.1 percent revenue jump over the previous year. ChangYou also bought into a browser-game specialist called 7Road last spring with the intention of expanding its interests beyond traditional MMORPGs. All told, Gamasutra says that ChangYou contributed an impressive $327 million in revenue to a $5 billion Chinese game market.
Canon's second quarter profits dip 20 percent amid supply constraints, strong yen
Canon had some good news and some bad (but not unexpected) news in its second quarter earnings released today. On the upside, the company has raised its profit outlook for the rest of the year, and says that the recovery from the earthquake that forced it to halt camera production has been "quicker than expected." That halt to production did take a considerable toll on the company, however, and contributed to a 20 percent drop in net profits to ¥53.86 billion, or $685.7 million, compared to a year ago -- a figure that was compounded by a strong yen that further cut into its earnings overseas. That revised profit outlook comes in part from an updated shipment forecast for interchangeable lens cameras -- it now expects to ship 7.3 million instead of seven million, although its forecast for compact cameras remains unchanged at 20 million. Could that also include a few mirrorless models? Perhaps, although all indications are than an actual release will have to wait until sometime next year.
Microsoft Q4 FY11: revenue, earnings, and profits all up, beating expectations
The news wasn't so good for Nokia this morning, but its new bedmate is in much, much better shape. Microsoft's Q4 earnings for the 2011 fiscal year have been posted, showing revenue of $17.37 billion -- up eight percent over the same period last year, and besting the $16.43 billion record Q3. That drove $5.87 billion in net income, which is a whopping 30 percent climb over the year previous. Looking back over the full year, revenue broke another record, clocking in at $69.94 billion, 12 percent higher than the year before. Why all the good news? Well, the Entertainment & Devices Division saw a 30 percent revenue jump in the quarter, 45 percent over the year, as the Xbox 360 and Kinect continue to sell like gangbusters. Bing and Online Services also had good news, 17 percent revenue growth in the quarter thanks to the plucky search engine gaining ever more ground against the competition. But, not everything is rosy, with the Windows-related revenue staying flat -- down one percent this quarter, two percent over the year. Windows 8 will surely turn things around on that front, though, right?
Nokia Q2 2011: 'clearly disappointing' results as challenges prove 'greater than expected'
With Nokia still yet to fully dive in to the Windows Phone swimming hole, you had to know it was going to be another ugly quarter's worth of results. And it is. The company just posted its Q2 2011 numbers and there's a definite downward trend. Operating profits declined 44 percent since Q1, 391 million Euro compared to 704, and net sales of mobile devices are down 23 percent over the same period -- 20 percent compared to Q2 last year. CEO Stephen Elop quite naturally tried to spin this thing in the right direction: The challenges we are facing during our strategic transformation manifested in a greater than expected way in Q2 2011. However, even within the quarter, I believe our actions to mitigate the impact of these challenges have started to have a positive impact on the underlying health of our business. Most importantly, we are making better-than expected progress toward our strategic goals. But, he can't deny the obvious, calling the results "clearly disappointing." Looking forward, Elop expects "competitive pressures to continue," but indicates the company has a "clear strategy" to improve things. He says those who have seen the company's early Windows Phone devices (really, who hasn't) are "very optimistic" about their potential and that they hope to launch this year with a "sequence of concentrated product launches. Very expensive launches, we hear. Update: Elop just wrapped up his portion of the company's earning call. A summary and a few choice quotes are available below.
Apple Q3 2011 earnings released: Impressive, most impressive. (Updated)
Apple hit another home run in the third quarter of 2011. Total revenue for the quarter reached US$28.57 billion, as compared to $15.70 billion in the same quarter last year. Earnings per diluted share were $7.79, as compared to $3.51 last year. Net profit reached a staggering $7.31 B. All of these figures crushed the professional analyst estimates and even surpassed some of the more optimistic amateur AAPL watchers, as tracked by Phil Elmer-Dewitt. Sales numbers for Apple's lineup of products are as follows: 3.95 M Macs (14% year-over-year unit increase) 20.34 M iPhones (142% yoy increase) 7.54 M iPods (20% yoy decrease) 9.25 M iPads (183% yoy increase) That earnings per share number is really quite amazing; it's more than double the number from last year. Additional details will be available in the earnings conference call at 5 pm ET. We'll be listening in to the conference call and liveblogging all the fun -- join in! Show full PR text Apple Reports Third Quarter Results All-Time Record Revenue and Earnings iPhone Sales Grow 142 Percent; iPad Sales Grow 183 Percent CUPERTINO, Calif.--(BUSINESS WIRE)--Apple® today announced financial results for its fiscal 2011 third quarter ended June 25, 2011. The Company posted record quarterly revenue of $28.57 billion and record quarterly net profit of $7.31 billion, or $7.79 per diluted share. These results compare to revenue of $15.70 billion and net quarterly profit of $3.25 billion, or $3.51 per diluted share, in the year-ago quarter. Gross margin was 41.7 percent compared to 39.1 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter's revenue. "Right now, we're very focused and excited about bringing iOS 5 and iCloud to our users this fall." The Company sold 20.34 million iPhones in the quarter, representing 142 percent unit growth over the year-ago quarter. Apple sold 9.25 million iPads during the quarter, a 183 percent unit increase over the year-ago quarter. The Company sold 3.95 million Macs during the quarter, a 14 percent unit increase over the year-ago quarter. Apple sold 7.54 million iPods, a 20 percent unit decline from the year-ago quarter. "We're thrilled to deliver our best quarter ever, with revenue up 82 percent and profits up 125 percent," said Steve Jobs, Apple's CEO. "Right now, we're very focused and excited about bringing iOS 5 and iCloud to our users this fall." "We are extremely pleased with our performance which drove quarterly cash flow from operations of $11.1 billion, an increase of 131 percent year-over-year," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the fourth fiscal quarter of 2011, we expect revenue of about $25 billion and we expect diluted earnings per share of about $5.50." Apple will provide live streaming of its Q3 2011 financial results conference call beginning at 2:00 p.m. PDT on July 19, 2011 at www.apple.com/quicktime/qtv/earningsq311.
Sony Ericsson posts surprising Q2 loss, blames Japanese earthquake
Many analysts and market watchers were expecting a strong Q2 earnings report from Sony Ericsson today, but the company took them by surprise, posting a net loss of some €50 million (about $70.5 million), compared with a net gain of €12 million (around $17 million) at the same time last year. The manufacturer also sold only 7.6 million phones during the quarter, marking a 31 percent year-on-year decrease, while overall revenue fell from €1.76 billion (about $2.5 billion) last year to €1.19 billion (almost $1.7 billion) during Q2 2011. CEO Bert Nordberg attributed much of the decline to the Japanese earthquake, which disrupted the venture's supply chain, resulting in the loss of around 1.5 million devices. The report comes after Sony Ericsson launched a widespread cost-cutting campaign and re-focused its efforts on smartphone production, which comprised more than 70 percent of all sales during Q2, compared with just 40 percent at the end of last year. For a more thorough breakdown, head past the break for the full press release.
Apple's Asia-Pacific profits reportedly soaring
Apple might be growing in the US thanks to brisk sales of the MacBook Air and the expansion of the iPhone 4 to Verizon Wireless, but in Asia-Pacific, the Cupertino company is exploding. Over the past five years, Apple's revenue has climbed from US$14 billion in 2005 to $64 billion in 2010. During that time, international revenue grew a staggering 727%, while US revenue grew 268%. Profit showed a similar trend with Asia-Pacific increasing by a whopping 2,991% in the last five years. US profit also grew, but only at a comparatively small rate of 682%. This upward trend is expected to continue in the current 2011 fiscal year. Last year, Apple reported $8.25 billion in sales to the Asia-Pacific region. We are half way through this year and Apple has already reached $5 billion in sales. Its sales are expected to quadruple year-over-year, and Apple hasn't even tapped into China's lucrative mobile phone market. Apple sells the iPhone through China Unicom, which has 170 million subscribers (a number that pales in comparison with 600 million subscribers on China Mobile). Overall, China has over 900 million mobile phone users. If Apple could produce an iPhone for China Mobile and China Telecom, its resulting revenue and profits could go off the charts.
Digital games distribution earned $3.8 billion in 2010, a quarter of entire video game market
Alright, so technically all video games are digital, but what we're talking about here is the stuff that you don't buy on physical media -- downloadable games, add-on content, mobile apps, subscriptions, and gaming on social networks. That market has grown to account for 24 percent of all video game revenues in 2010, or $3.8 billion, according to the Entertainment Software Association. The ESA is the body running the currently ongoing E3 shindig, and its data comes from the NPD Group, which likes to keep a cold robotic finger on the gaming industry's pulse. Other findings in the latest ESA study include the average age of gamers (37!), the best-selling genres (action with 21.7 percent, followed by sports at 16.3 percent), and the highest-grossing games of 2010 (no prizes for guessing the warmongering winner of that one). Give the source link a bash to immerse yourself in even more gaming trivia from yesteryear.
HTC sales in May reached $1.42 billion, more than double last year's total
We're seriously considering just reposting the same bit of text every time HTC's earnings come up for discussion. The story never seems to change. Taiwan's premier smartphone maker has once again blown away its performance from the previous year, having informed the Taiwan Stock Exchange that it tallied up T$40.62b ($1.42b) in consolidated sales for May 2011. That's a neat chunk of change more than April's T$38.73b and it also comfortably dwarfs last year's May total of T$18.82b ($656m). There's no breakdown of what devices are to credit for HTC's ever-ascending revenues, but if you ask us, its future prosperity looks pretty good with the Sensation, EVO 3D, and a few tablet-shaped things lurking on the horizon.
NGP to be less 'investment heavy,' more 'affordable'
After years of losses in its PS3 division, it's no surprise that Sony's not attempting a fiscal encore. Just the opposite, in fact. Massaru Kato, Sony's Chief Financial Officer, stated recently that the upcoming NGP handheld won't be as "investment heavy" as previous platforms. What does this mean? Sony probably won't pour cash into developing new semiconductors just for its new handheld, and will instead opt to build NGP hardware with off-the-shelf and readily available components. This could translate to competitive pricing versus Nintendo's 3DS (we hope), but it's all quiet on the pricing front at Sony HQ. That's liable to change at E3 next week, but regardless we'd rather not have to wait four years just to hear Yoshida's good news again.
Perfect World Entertainment surpasses market expectations
Perhaps the belief that free-to-play games are bad and do not make money is unfounded. If you asked anyone with stock in Perfect World Entertainment, he would tell you that F2P is where it's at. The creator of the Perfect World International and Forsaken World has stunned the market as it reported a 15% revenue increase last quarter (January 2011 to March 2011) over last year (January 2010 to March 2010.) However, the biggest surprise is the amount of profit the company generated. The 110% growth over last year greatly surpassed the high-end expectations of the company itself. CEO Michael Chi attributed the stellar growth to the recent release of Forsaken World and Empire of the Immortals. But the profit is due to more than the entry of these two games into the market. "At the same time, we also experienced lower sales and marketing expenses as we did not have as many new launches as we did in the previous quarter. All of these factors contributed to our strong bottom-line growth in the first quarter," Chi explains in a Gamasutra article. Perfect World Entertainment hopes for continued growth as it continues to solidify its place in the F2P market with more games coming soon.
Gold Capped: Cataclysm glyph addons
Every week, WoW Insider brings you Gold Capped, in which Basil "Euripides" Berntsen aims to show you how to make money on the auction house. Email Basil with your questions, comments, or hate mail! The glyph market has spawned quite a few of the important modern auction house addons. It's a uniquely challenging market, as there are hundreds of different products, each with their own balance of suppliers, buyers, and materials. The challenges faced by early glyph producers were met by a hodgepodge of fairly complex addons and macros, and only recently have unified solutions began to appear. I remember that at one point, I had addons to: Keep track of how many glyphs I had on the AH, in various characters' banks and in their inventories. Allow me to queue a list of glyphs and build a materials list (that allowed me to buy the vendor mats with one click). Automatically queue enough glyphs in the second addon to assure that I kept stock levels at my desired level. Automatically post every glyph I made onto the AH. The tasks needed for this market are not unique, and so the most important tool that can trace its origin to the glyph market is certainly TradeSkillMaster. TSM is an addon that I've covered before, and it's built from the ground up to be perfect for glyphs. It's also perfect for a lot of other markets, but mostly those you can treat like glyphs.
Sony loses $3.2B, spends $170M in response to hacker attacks
Sony's bad year is getting a smidge worse. The company, which had previously predicted a healthy profit for the past fiscal year, is now expecting a loss of $3.2 billion for the period of April 2010 through March 2011. The reverse in fortunes is mostly due to writing off a $4.4 billion tax credit, although the company has been struggling with both the recent earthquake and hacker attack that disrupted operations of both its physical operations and online services. Sony CFO Masaru Kato doesn't beat around the bush: "In the first quarter, we saw quite a major impact on our manufacturing activities." Sony also has spent over $170 million in response to the hacking intrusion last month. These funds went to rebuilding the network, providing identity protection coverage, investigating the attacks, free game time, and customer support. This is the second straight year that Sony has operated at a loss, although last year's $439 million wasn't nearly as severe as this promises to be.
Sony estimates $3.2b loss this year, $171 million cost for PSN breach
It has not been a good year for Sony, which was affected both by the massive earthquake in March and the PSN outage that spanned from April into May. There couldn't be any doubt that those things would have a drastic impact on the company's bottom-line, and it's now taking the time to give investors an idea of just how big an impact that could be -- even though the financial issues lie largely elsewhere. Sony is set to announce its full financial report for its fiscal year this Thursday and, to soften the blow, estimates have been revised steeply downward. Previously Sony predicted a ¥70 billion ($855 million) profit, but now thinks a ¥260 billion ($3.14 billion) loss is rather more accurate -- a ¥360 billion non-cash charge taking the wind out of ¥200 billion in operating income. The earthquake was directly blamed for a loss of ¥22 billion, but that figure could certainly grow as this estimate is only through the end of March. Additionally, Sony has provided a early guess of a ¥14 billion (about $172 million) total cost for the PSN breach. That's less than two bucks per exposed account, but again we wouldn't be surprised if it's a figure that increases through the year. You know, once the lawyers start having their fun.
NCsoft increases profits, maintains revenues
It's a banner year over at the NCsoft household, as the company is showing a strong rise in net profits for the first quarter this year. Even though NCsoft's revenues have held relatively steady during Q1 2011, profits are up by 30% for a total of $37.5 million due to recent promotions in Lineage and Aion. The vast majority of NCsoft's money comes from Korea, with Chinese and Western markets trailing behind. According to Gamesindustry.biz, Aion is making the most bank for the company (accounting for 44% of revenues), followed by Lineage (28%) and Lineage 2 (22%). NCsoft's Sara Rogers sees nothing but good news in these numbers: "NCsoft consistently delivers strong figures in a way that most other games publishers can only dream of. These results prove that we have the MMO brands that people want to play and that we're able to grow and maintain customer loyalty, which is crucial in successful MMO publishing. This year, Gamescom will be very significant for us. We'll have a major presence and maybe even steal a headline or two."
For the first time ever, Apple beats Microsoft in quarterly profit
Today Microsoft announced its net profit for the first calendar quarter of 2011. That net profit was $5.23 billion, or $760 million dollars less than Apple's $5.99 billion net profit over the same period. For those keeping track, first Apple surpassed Microsoft in market capitalization, next they surpassed Microsoft in quarterly revenue, and now Apple has surpassed Microsoft in quarterly profits. Surpassing Microsoft's net profit is quite an accomplishment given the typical high-margin sales of Microsoft's software and the lower-margin sales of Apple's hardware. Matter of fact, by every standard financial measure, Apple has now surpassed Microsoft to be the most profitable and valuable tech company on the planet. No wonder some people think Apple is headed to be the first trillion dollar company. [via MacRumors]
Gold Capped: Buy low, sell high
Every week, WoW Insider brings you Gold Capped, in which Basil "Euripides" Berntsen aims to show you how to make money on the auction house. Email Basil with your questions, comments, or hate mail! Everyone who gets into the auction house to make tons of gold immediately assumes that it's done by buying low and selling high. Seems simple enough, and it's one of those chestnuts that we've all heard Wall Street types talking about. Brokerage takes no trade skills, no addons, and it feels like making money from nothing. A lot of what I've written about for this column has focused on how to use trade skills for profit, but the truth is that brokerage really can be a profitable use of your time. It's not as easy as it sounds, but assuming you have a solid understanding of what you're doing, you can use it to good effect.
Sony Ericsson's Q1 profit falls 48 percent on weak sales, low supplies
We knew Sony Ericsson's supplies were tight following the recent natural disasters in Japan, but in retrospect it's clear the phone maker was already having a rough quarter. The company released its Q1 earnings today, and reported that its profit fell 48 percent to €11 million ($15.8 million) due to weak sales -- a shortfall compounded by higher taxes and quake-related supply constraints. To be fair, at this time last year, the company earned money after a sweet tax benefit, so its profit wasn't completely built on strong sales. All told, it sold 8.1 million phones in the most recent quarter -- down 23 percent from the same period a year ago, though the average selling price for handsets ticked up 5 percent. In particular, smartphones accounted for 60 percent of the company's sales, though by the company's own estimate, it's only snagged 5 percent of global market share. And, it seems, Sony Ericsson's management team isn't getting too ambitious -- it forecast just a "modest" uptick in overall phone sales in 2011.
New Acer will be more like Apple, less like HP
The details behind the rift that saw Acer's CEO Gianfranco Lanci (pictured) suddenly resign yesterday are now starting to emerge. Simply put, Acer's board wants the Taiwanese company to be more like Apple and HTC, according to Bloomberg, raking in big profits on fat margins. Lanci's approach, however, was to aggressively increase volumes and use its scale to negotiate cheaper prices from suppliers in a race to steal market share from Dell and HP. According to data compiled by Bloomberg, Acer's profit margin in the last fiscal year was just 2.3 percent compared to Apple's 21.5 percent. Daunting, to say the least. With Lanci gone, JT Wang, Acer's chairman and temporary CEO, plans to put more effort into expanding its smartphone and tablet business while broadening efforts around enterprise sales. For Wang, Lanci's departure marks a break with the past, saying, "Recently the iPad [tablet computer] and other new form factors have had a very big impact on the PC market. We have to change our business strategy." While PCs will still be core to the business, Wang said "we won't be in a hurry to change to become the world number one." Unfortunately for Acer, its brand is more closely associated with low-cost laptops than with the premium devices required to significantly expand its profit margins. We'd wish 'em luck but we think Acer will be better served by an innovative CEO and focused R&D.
