Nokia announces return to black with Q4 2012 financial results

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Jan 242013

Nokia today announced its financial results for the last quarter of its fiscal 2012 year. It had a pleasant surprise for its stockholders, reporting a profitable quarter after six quarters of losses. It saw an operating profit of US$585 billion (€439 million) on net sales of US$10.7 billion (€8.04 billion). According to CEO Stephen Elop,

“We are very encouraged that our team’s execution against our business strategy has started to translate into financial results. Most notably we are pleased that Nokia Group reached underlying operating profitability in the fourth quarter and for the full year 2012.

While the first half of 2012 was difficult for Nokia Group, in Q4 2012 we strengthened our financial position, improved our underlying operating margin in Devices & Services, introduced the HERE brand to expand our mapping and location experiences, and drove record profitability in Nokia Siemens Networks.

We remain focused on moving through our transition, which includes continuing to improve our product competitiveness, accelerate the way we operate and manage our costs effectively. All of these efforts are aimed at improving our financial performance and delivering more value to our shareholders.”

As it had previously announced, Nokia shipped 4.4 million Windows Phone Lumia devices during the quarter, up 51% from the 2.9 million the previous quarter. Of those, 700,000 were sold in North America, still Nokia’s smallest market. It also shipped another 2.2 million Symbian devices and 9.3 million Asha handsets.

Nokia expects that it could return to a loss in Q1 2013 due to “competitive industry dynamics” and Q1 typically being a slower quarter.

It remains to be seen if Nokia will announce new Lumia smartphones at MWC 2013. Recent rumours have pointed to a “true PureView Windows Phone” codenamed the Nokia EOS and the Nokia Catwalk.

Read more: Nokia

Apple announces fiscal 2013 Q1 results

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Jan 242013

Apple yesterday announced financial results for the first quarter of its fiscal 2013 year. It once again posted impressive numbers but is also facing stiffer competition on many sides. Quarterly revenues came in at US$54.5 billion with quarterly net profits topping US$13 billion. Despite this year’s quarter being a week shorter than last year’s quarter, Apple still beat last year’s numbers.

“We’re thrilled with record revenue of over $54 billion and sales of over 75 million iOS devices in a single quarter,” said Tim Cook, Apple’s CEO. “We’re very confident in our product pipeline as we continue to focus on innovation and making the best products in the world.”

Apple sold a record 47.8 million iPhones over the quarter, up from 37 million the same quarter a year ago). It also sold a record 22.9 million iPads (up from 15.4 million a year ago), 4.1 million Macs and 12.7 million iPods. Both Macs and iPod volumes dropped from last year.

Underlying the stiffer competition it is facing (among other factors), Apple’s gross margin for the first quarter came in at 38.6%, down from 44.7% the same quarter a year ago.

Apple expects revenues to fall in the US$41 billion to US$43 billion range for the next quarter.

Read more: Apple

Nokia ships 4.4 million Lumia smartphones in Q4 2012

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Jan 102013

Nokia today issued a fourth-quarter preliminary report and the news is much more positive than it has been in past quarters. Its Mobile Phones business unit and Lumia portfolio both delivered better than expected results. Nokia now expects that its Devices & Services group will exceed expectations and achieve “underlying profitability” for Q4 2012. According to Stephen Elop, Nokia CEO:

“We are pleased that Q4 2012 was a solid quarter where we exceeded expectations and delivered underlying profitability in Devices & Services and record underlying profitability in Nokia Siemens Networks. We focused on our priorities and as a result we sold a total of 14 million Asha smartphones and Lumia smartphones while managing our costs efficiently, and Nokia Siemens Networks delivered yet another very good quarter.”

In particular, Nokia reports sales of 4.4 million Lumia-branded Windows Phones in the quarter. That amounts to a 51% jump over the 2.9 million devices shipped in Q3. It’s not clear how this breaks down between Windows Phone 8 and Windows Phone 7 devices. It also shipped 9.3 million Asha full touch “smartphones” and 2.2 million Symbian smartphones.

Nokia expects Q1 2013 to be tougher due to “competitive industry dynamics” and the general seasonal weakness of the quarter. Margins could fall into negative territory again as a result.

Nokia will issue its full Q4 and full year 2012 financial results on January 24th, 2013.

Read more: Nokia

Samsung expects record US$8.3 billion Q4 profit thanks to mobile phones

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Jan 082013

Samsung Electronics yesterday delivered its fiscal year 2012 Q4 earnings guidance. The company expects sales to reach 56 trillion Korean Won (about US$5.27 billion) with profits to come in at 8.8 trillion Won (about US$8.3 billion). This would be yet another record, the latest in a string of five record quarters.

Much of this success is attributed to mobile devices and components for these. Samsung said that it sold close to 500 handsets a minute during the quarter. If so, Samsung mobile phone (smartphones and feature phones) sales could top 65 million units for the quarter.

According to Reuters, Samsung launched more smartphone models than its competitors. It released 37 smartphone models (including variants for different markets). In comparison, LG launched 24, HTC a further 18, Nokia 9, and Apple only one, the iPhone 5.

Samsung has even more ambitious goals for 2013. It is looking to ship 510 million mobile phones in 2013.

Samsung will release its full earnings report by January 25.

Read more: Samsung and Reuters

RIM announces Q3 fiscal 2013 results, beats expectations but loses subscribers

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Dec 202012

Research In MotionResearch In Motion today announced its Q3 fiscal 2013 results. Revenues came in at US$2.7 billion, down 5% from Q2’s US$2.9 billion and down 47% from US$5.2 billion the same quarter a year ago. As a result, the company posted a loss of US$114 million or US$0.22 per share but beat Wall Street’s expectation of a loss of US$0.35 a share.

“RIM continued to execute on its product roadmap plans and to deliver on key financial metrics as it gets set for the global launch of BlackBerry 10,” said Thorsten Heins, President and CEO. “During the third quarter, we continued to demonstrate our strong financial position, generating $950 million in cash flow from operations, and increasing our cash position significantly to more than $2.9 billion. More than 150 carriers are currently completing technical acceptance programs for the first BlackBerry 10 products, and beta trials of BlackBerry Enterprise Service 10 are underway at more than 120 enterprises including 64 Fortune 500 companies. This is an exciting time and our carrier partners, application developers and employees are all looking forward to unveiling the innovation and excitement of BlackBerry 10 to our customers on January 30, 2013.”

RIM shipped 6.9 million BlackBerry smartphones and about 255,000 BlackBerry PlayBooks. In all, hardware accounted for 60% of its revenues.

For the first time ever, RIM saw its BlackBerry subscriber base fall. At the end of this latest quarter, RIM had 79 million users, losing about 1 million since August. A breakdown of numbers was not provided but it’s likely that growth in emerging markets such as Nigeria and the Philippines is not enough to offset losses in mature markets such as North America.

The company expects its next quarter to be as challenging. The launch of BlackBerry 10 will require significant marketing effort to promote its new operating system and devices. At the same time it expects to take further “pricing initiatives” on BlackBerry 7 devices to maintain its subscriber base. It also expects that BlackBerry 7 sales will be further impacted as customers defer purchases until the new devices launch.

RIM will launch its new BlackBerry 10 devices (including the BlackBerry Z10?) next month. Now the turnaround can begin in earnest.

Read more: Research In Motion

Samsung announces fiscal Q3 2012 results

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Oct 262012

SamsungApple was not alone yesterday in announcing its latest financial results. Samsung announced its fiscal 2012 third quarter results with revenues coming in at 52.18 trillion Korean won (about US$47.5 billion) and record operating profits of 8.12 trillion won (about US$7.4 billion).

Samsung attributed much of its success to increased mobile phone sales and stronger demand for display panels. Its Mobile Communications Business alone accounted for more than half of its revenues. Without providing any shipment numbers, it singled out its flagship Samsung Galaxy S III as a “key” driver in raising profit margins. It also described sales of its Galaxy Tab and Galaxy Note 10.1 tablets as “strong.”

Looking forward, Samsung expects Q4 to be another strong quarter despite increasing competition. According to Robert Yi, Senior Vice President and Head of Investor Relations:

“The business environment remained difficult with global economic uncertainties persisting amid the fiscal concerns in the US and Europe. However, we continued to break our quarterly profit records. We will do our best to sustain our earnings momentum throughout the fourth quarter by implementing strategies we have developed for our businesses.”

Samsung is definitely on a roll; this was its fourth consecutive record quarter. Will it be able to make it five in a row?

Read more: Samsung

Apple announces fiscal Q4 2012 results

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Oct 252012

AppleApple today announced its fiscal 2012 fourth quarter results. The company again posted numbers that would make many of its competitors envious but there were signs that competition is heating up.

“We’re very proud to end a fantastic fiscal year with record September quarter results,” said Tim Cook, Apple’s CEO. “We’re entering this holiday season with the best iPhone, iPad, Mac and iPod products ever, and we remain very confident in our new product pipeline.”

Revenues came in at US$36.0 billion with a net profit of US$8.2 billion. A year ago, Apple recorded revenues of US28.3 billion and a net profit of US$6.6 billion. International sales accounted for 60% of revenues. It sold 26.9 million iPhones (a 58% unit growth over the same quarter a year ago) and 14 million iPads (a 26% unit growth over the year-ago quarter). It also sold 4.9 million iMacs, 5.3 million iPods, and 1.2 million Apple TVs.

iPad numbers in particular came in lower than many analysts predicted. Not only did many potential buyers hold out to see what Apple would announce back on October 23rd but sales of competing products are also improving. Collectively, Android tablets accounted for 41% of the global tablet shipments in Q3.

Apple remains a very healthy company with a solid device lineup; it’s just facing stiffer competition than it has in a while.

Read more: Apple

Nokia ships 2.9 million Lumia smartphones in latest fiscal Q3 2012 quarter

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Oct 182012

NokiaNokia’s troubled turnaround continues as the company today announced its fiscal Q3 2012 results, posting a lower-than-expected loss in what it described as “a difficult quarter.” Overall revenues came in at &euro7.2 billion (about US$9.45), down 19% over the same quarter a year ago and down 4% over the previous one. This translated into a loss of €576 billion (US$755 billion). According to Nokia CEO Stephen Elop:

As we expected, Q3 was a difficult quarter in our Devices & Services business; however, we are pleased that we shifted Nokia Group to operating profitability on a non-IFRS basis.

In Q3, we continued to manage through a tough transitional quarter for our smart devices business as we shared the exciting innovation ahead with our new line of Lumia products.

In our mobile phones business, the positive consumer response to our new Asha full touch smartphones translated into strong sales. And in Q3, our mobile phones business delivered a solid quarter with sequential sales growth and improved contribution margin.

Nokia Lumia smartphone shipments fell to 2.9 million devices from 4 million the previous quarter. In North America, Nokia shipped a mere 300,000 smartphones, down from 700,000 the previous quarter. This is the first time that shipments fell since the introduction of the Lumia line. With new devices coming and the fact that current devices will not be upgraded to Windows Phone 8, customers appear to have taken a wait-and-see approach this quarter. The upcoming launch of the Nokia Lumia 820 and 920 will hopefully turn that trend around again.

Nokia’s net cash fell to €3.56 billion from €4.2 the previous quarter. With Nokia predicting that its Q4 will prove as difficult as it continues to transition to its new Windows Phone 8 Lumia devices, it will have to continue to dip into its coffers to continue operating.

Read more: Nokia

RIM announces better than expected Q2 Fiscal Year 2013 results

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Sep 272012

Research In MotionResearch In Motion today announced its Q2 Fiscal Year 2013 results and delivered better news than expected. Revenues comes in at US$2.9 billion, up 2% over the previous quarter. Despite the better than expected revenues, RIM still recorded a net loss of US$235 million (including restructuring costs).

“Despite the significant changes we are implementing across the organization, our second quarter results demonstrate that RIM is progressing on its financial and operational commitments during this major transition,” said Thorsten Heins, President and CEO. “Subscribers grew to approximately 80 million global users, revenue grew sequentially from the first quarter, cash, cash equivalents, short-term and long-term investments increased by approximately $100 million to $2.3 billion, and carriers and developers are responding well to previews of our upcoming BlackBerry 10 platform. Make no mistake about it, we understand that we have much more work to do, but we are making the organizational changes to drive improvements across the company, our employees are committed and motivated, and BlackBerry 10 is on track to launch in the first calendar quarter of 2013.”

RIM reconfirmed that it now had 80 million subscribers and reported shipments of 7.4 million BlackBerry smartphones and 130,000 BlackBerry PlayBooks.

While the news was far better than many had expected, RIM still expects to face “continued pressure” due to “the increasing competitive environment, lower handset volumes, increased marketing expense associated with the launch of BlackBerry 10, and some impact from pressure by customers to reduce RIM’s monthly infrastructure access fees.” It predicts another loss for the next fiscal quarter.

RIM also reiterated that BlackBerry 10 remains on track for a Q1 2013 launch.

Read more: Research In Motion

Strong smartphone sales power Samsung to record Q2 2012 profits

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Jul 262012

SamsungSamsung today announced its Q2 2012 financial results, posting record profits of US$5.9 billion (matching earlier guidance). Its mobile group contributed about 60% of this profit due in large part to strong smartphone sales (including those of the recently launched Samsung Galaxy S III).

Samsung no longer discloses smartphone shipment numbers but estimates suggest that it shipped about 50 million smartphones in the quarter. If so, this would nearly be twice as many as Apple sold (26 million in its last quarter).

While Samsung expects its third quarter to be “marginally positive,” its smartphone division is expected to continue to show strong growth. Samsung’s shipments could jump again with some analysts expecting Galaxy S III sales to hit 20 million units. Samsung is also planning to launch new products “with diverse price ranges” (including the expected Galaxy Note 2) that should also help drive strong shipment numbers.

Read more: Reuters

Nokia ships 4 million Windows Phone Lumia devices in Q2

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Jul 192012

NokiaNokia today issued an interim financial report for its Q2 2012. Sales rose marginally to €7.5 billion from €7.4 billion the previous quarter, resulting in a total operating loss of €826 million (around $1 billion). Net cash still rose by €102 million (around $125 million) thanks in part to licensing royalties and platform support payments from Microsoft.

Nokia shipped 83.7 million phones, including 4 million Lumia smartphones, worldwide in Q2. In North America, Nokia shipped 600,000 mobile phones, a figure that includes Lumia smartphones as well as non-Windows Phone devices. This suggests that its “Operation Rolling Thunder” marketing effort fells short of Nokia’s expectations. Canadian sales numbers are not broken out of the North American ones.

According to Nokia CEO Stephen Elop:

“Nokia is taking action to manage through this transition period. While Q2 was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competitiveness, improve our operating model and carefully manage our financial resources.

We shipped four million Lumia Smartphones in Q2, and we plan to provide updates to current Lumia products over time, well beyond the launch of Windows Phone 8. We believe the Windows Phone 8 launch will be an important catalyst for Lumia.”

Nokia saw the average selling price (ASP) of its Smart Devices rise from €143 ($176) last quarter to €151 ($185) this quarter as it continued its transition to Lumia devices which have a higher ASP than Symbian devices. Still, the Lumia line’s ASP fell itself as Nokia began to offer lower-end Windows Phone devices such as the Nokia Lumia 610 and cutting the price of higher-end models, such as AT&T’s Lumia 900 recent cut.

Nokia expects that the next quarter will be as “difficult” as recent quarters. Its Smart Devices group will face challenges due to product transitions (especially as Windows Phone 7.5 devices will not be upgraded to Windows Phone 8).

Read more: Nokia

Galaxy S III to help power Samsung to US$5.9 billion Q2 profits

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Jul 062012

SamsungSamsung earlier today provided guidance for its April to June quarter ahead of the announcement of its financial results later this month. It expects to announce a record quarterly profit of US$5.9 billion and attributes much of this to the success of its Galaxy line of smartphones and the Galaxy S III in particular. Revenues are estimated to come in at about US$41.4 billion.

You only have to look back one quarter to find Samsung’s previous profit record. If the numbers hold, the new record will mark a 14.5% improvement. It would also be a 77% improvement over the same quarter a year ago.

Samsung’s mobile division will account for about 70% of earnings with profits nearly doubling over the last year. Smartphone sales could top 50 million (or 380 handsets every second). Samsung expects that cumulative Galaxy S III sales alone will top 10 million units in July.

Upcoming quarters could be more difficult for Samsung (and other companies). It is particularly worried about the effect of the European debt crisis on sales of its televisions and home appliances.

Read more: Reuters

RIM announces dismal first quarter fiscal 2013 results

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Jun 292012

Research In MotionResearch In Motion yesterday announced its Q1 fiscal Year 2013 results. While many had expected poor results, the final numbers proved far worse. RIM reported an operating loss of US$518 million, its first since fiscal year 2004. Revenues for the quarter came in at US$2.8 billion, down 33% from US$4.2 billion in the prior quarter and down 43% from the same quarter a year ago. It still managed to ship 7.8 million BlackBerry smartphones and 260,000 BlackBerry PlayBook tablets.

“Our first quarter results reflect the market challenges I have outlined since my appointment as CEO at the end of January. I am not satisfied with these results and continue to work aggressively with all areas of the organization and the Board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the Company on areas that have the greatest opportunities,” said Thorsten Heins, President and CEO. “Our top priority going forward is the successful launch of our first BlackBerry 10 device, which we now anticipate will occur in the first quarter of calendar 2013. In parallel with the roll out of BlackBerry 10, we are aggressively working with our advisors on our strategic review and are actively evaluating ways to better leverage our assets and build on our strengths, including our growing BlackBerry subscriber base of approximately 78 million, our large enterprise installed base, our unique network architecture and our industry leading security capabilities.”

RIM also announced that it would reduce its workforce by a further 5,000 employees. It has 16,500 employees worldwide today.

In a bid to reduce costs, RIM will also streamline its supply chain by reducing external manufacturing sites from 10 down to three. Celestica earlier this month announced it would no longer manufacture BlackBerry smartphones. It will also outsource parts of the Company’s Global Repair operations.

The future looks grim as well. Aside from BlackBerry 10 being delayed to 2013, RIM also expects to report an operating loss in its fiscal second quarter as well. Subsequent quarters will also be “very challenging for its business.”

On the positive side, RIM’s global subscriber base is still growing. All regions are continuing to gain subscribers except North America. It gave no numbers though. BlackBerry App World now also continues to grow and now has over 89,000 applications available.

The question many will be asking today is: Can Research In Motion survive on its own?

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RIM projects Q1 operating loss

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May 292012

Research In MotionResearch in Motion today issued a business update that confirms a grim future for the company during its transition to BlackBerry 10. It revealed that it expects to report a quarterly loss for its current quarter due as an “on-going competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace.” An expected US$1 billion inventory writedown is probably not helping matters either.

RIM also announced that it had hired J.P. Morgan Securities LLC and RBC Capital Markets to help it review its business and financial performance. Options on the table include “opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives.”

Confirming the rumoured layoffs (without giving numbers), RIM reiterated that it is looking to find savings of US$1 billion by the end of fiscal 2013. It will do so by “targeting better efficiency and use of resources in our sales and marketing initiatives” and eliminating “fragmentation, duplication and inefficiencies.”

Not all the news was bad. The company also announced that it expects to increase its cash position from the approximately US$2.1 billion it had at the end of fiscal 2012. It grew its global subscriber base to 78 million, primarily due to growth in international markets, and BBM now has 59 million users. Most importantly, it confirmed once more that it is on track to launch its next-generation BlackBerry 10 mobile computing platform in the latter part of calendar 2012.

RIM will announce its first quarter results in June.

Read more: Research In Motion

RIM facing US$1 billion writedown due to inventory

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May 292012

Research In MotionResearch in Motion may have to write off more than US$1 billion as its smartphones and tablets gather dust in warehouses instead of being snapped up by customers. The value of its inventory rose from US$618 million a year ago to over US$1 billion as lagging sales keep devices on shelves longer. This figure does not account for all the devices also in stock at RIM’s carriers and retail partners either. At the company’s peak in mid-2008, that value was than US$500 million.

As inventory sits in warehouses, it is gradually losing value. The writedown may be needed to account for that declining value. It would be RIM’s third recent writedown in recent history. It would follow similar moves in December (US485 million to write down PlayBook inventory value) and in March (US$267 million for BlackBerry inventory).

RIM’s market share has been dropping quickly in recent months. According to research firm IDC, it stood at 6.4 percent last quarter, half of what it was the same quarter a year ago.

RIM is pinning its hopes of a resurgence on its upcoming BlackBerry 10 operating system and devices. These are expected in the “latter part” of the year. Until then, the news from RIM promises to be grim (such as the recent rumour of another 2,000 layoffs).

Read more: Bloomberg