IBM Reports Q3 2012 Earnings; Revenues Down 5% to $24.7 Billion

IBM reported its earnings for the third quarter of 2012 yesterday, with its net income growing to $3.8 billion, nearly flat year-over-year, and its revenues shrinking 5% to $24.7 billion. Most of the decline in revenue growth can be attributed to the economic slowdown in Europe and other parts of the world.

Virginia Rometty, IBM chairman, president and CEO, said:

“In the third quarter, we continued to drive margin, profit and earnings growth through our focus on higher-value businesses, strategic growth initiatives and productivity.

Looking ahead, we see good opportunity with a strong product lineup heading into this quarter and annuity businesses that provide a solid base of revenue, profit and cash. We are reiterating our full-year 2012 operating earnings per share expectation of at least $15.10.”

IBM makes money primarily from three segments — services, software and hardware. Its technology services revenue declined 4% to $9.9 billion while business services revenue declined 6% to $4.5 billion.

Software revenue declined marginally to $5.8 billion, while hardware revenue totaled $3.9 billion, down 13% year-over-year. The global financing segment contributed $472 million to its top line.

IBM’s cash and cash equivalents grew to almost $12 billion this quarter.

via IBM – SEC

Intel Reports Q3 2012 Earnings; Revenues Flat at $13.5 Billion

It’s the earnings season again, and Intel was one of the technology giants to report its third quarter earnings. Its revenue in Q3 2012 was $13.5 billion, almost flat compared to the last sequential quarter. Its net income, however, was $3 billion, up 5.1% sequentially. It reported an operating income of nearly $3.8 billion, an generated $5.1 billion in cash from operations.

Paul Otellini, Intel president and CEO, said:

“Our third-quarter results reflected a continuing tough economic environment. The world of computing is in the midst of a period of breakthrough innovation and creativity. As we look to the fourth quarter, we’re pleased with the continued progress in Ultrabooks and phones and excited about the range of Intel-based tablets coming to market.”

The PC Client group which is primarily the consumer PC division generated $8.6 billion in revenue, while the Data Center Group which is the server chip business generated $2.7 billion in revenue.

Intel also projected Q4 2012 revenue at $13.6 billion, slightly higher than current revenue. Intel is trying hard to get a strong foothold in the mobile processor market, which is dominated by ARM. Intel’s future also depends on the success of Microsoft’s Windows 8 on tablets to some extent. The next couple of years might be decisive for Intel.

via Intel – SEC

eBay Q3 2012 Earnings: Revenue Jumps 15%, Profit Up 22%

eBay reported its earnings for Q3 2012, with its revenue increasing 15% to $3.4 billion year-over-year. Its net income was up to $597 million, up 22% year-over-year. Its core Marketplaces product and PayPal contributed to most of the growth.

John Donahoe, President and CEO of eBay, said:

“We had a great third quarter across our company, with Marketplaces and PayPal accelerating customer growth. Mobile continues to be a game changer for us, and we continue to be a clear leader in mobile commerce and payments. With our strong portfolio and global reach, we are consistently demonstrating our capabilities to help consumers shop anytime, anywhere. And we are enabling retailers of all sizes to compete in a rapidly evolving, multichannel commerce environment.”

PayPal saw its user base expand to 117.4 million active registered accounts, up 14% year-over-year. Revenue from PayPal increased 23% while the total payment volume grew 20% to $35.2 billion. PayPal continues to focus on mobile to drive most of its growth and also gained traction with PayPal Here, its competitor to Square.

In Marketplaces, the gross merchandise value increased 11% to $16 billion, while the revenue increased 9%, driven primarily by growth in the US and Asia Pacific. eBay’s cash and cash equivalents increased to $7.3 billion in the last quarter.

eBay is undergoing a significant change, as it recently introduced a new redesign, and also launched a new marketing campaign. PayPal is its prime focus now, led by David Marcus, who is now focusing on the product and customers to grow the dominant online payments service.

via eBay – SEC

Softbank to Acquire 70% of Sprint for $20.1 Billion

Last week, rumors had started floating that Softbank may be looking to acquire a majority stake in Sprint Nextel, for more than $12.8 billion, or 1 trillion Japanese yen. Today, it was officially announced that Softbank and Sprint have reached a deal. Softbank will be acquiring roughly 70% of the full diluted share count of Sprint Nextel through an entity called “New Sprint” for $20.1 billion.

Softbank will be buying $8 billion worth of shares from Sprint directly for $5.25 a share, and $12.1 billion worth of shares from external shareholders for $7.3 billion a share. The $8 billion payment will also include a convertible bond worth $3.1 billion.

If the deal doesn’t go through due to regulatory intervention or any other reason, Softbank would have to pay a termination fee of $600 million to Sprint. However, if Sprint’s shareholders don’t approve the transaction, it will have to pay $75 million to Softbank to cover its expenses. Softbank will be taking on significant debt to finance this deal.

This is a great deal for both parties, as Softbank would have an easy way to enter the U.S. market, while Sprint will get access to Softbank’s deep pockets and finance its network upgrades. Both are also developing LTE, which should give them the “economies of scale” advantage. They would also be in a much better position to take on AT&T and Verizon.

via Techcrunch

Workday Goes Public at $4.5 Billion Valuation

Yet another enterprise cloud software company, Workday, is all set to go public today. It has raised $637 million, by selling close to 22.8 million shares for $28 each. It will have a public float of around 14% after the IPO. It will be listed on the NYSE with the ticker “WDAY”, and currently has a valuation of $4.5 billion.

Workday’s primary offering is a cloud-based financial management and human resource management solution, which is used by more than 340 enterprise clients.

It generated close to $120 million in revenue in the first six months of 2012, but is yet to turn a profit.

While most consumer internet IPOs in the last couple of years have floundered, enterprise software companies have seen a warm reception at the public markets. Companies like Palo Alto Networks and Splunk have performed much better than the likes of Facebook, Zynga or Groupon.

Workday competes primarily with the likes of Oracle, SAP and Salesforce.com. As the cloud wars heat up, Workday might even end up being a hot acquisitiont target for one of the biggies.

via Bloomberg

Softbank May Acquire Majority Stake in Sprint Nextel

Sprint has been in the news for all the wrong reasons in the last couple of months. Unlike its bigger competitors, AT&T and Verizon, it’s in a relatively worse financial shape.

Reportedly, it may be in talks with the Japanese mobile carrier Softbank regarding a potential investment which would see the latter acquiring a majority stake in Sprint for more than $12.8 billion.

With the deal, Softbank would have an easy way to enter the U.S. market, while Sprint will get access to Softbank’s deep pockets and finance its network upgrades.

Any such deal would be welcomed by the regulators as it would increase competition in the space which is dominated by AT&T and Verizon. Sprint’s stock price jumped nearly 20% in morning trading, to nearly $6.

Softbank recently acquired eAccess, its rival in Japan, for $1.8 billion to boost its LTE capabilities. It has been expanding aggressively in recent times.

via Reuters

HTC Posts Its Unaudited Third Quarter Results; Profits Down 79%

The launch of Apple iPhone 5 was expected to drive down the sales of the Android handsets including the popular Galaxy S III. For Samsung, thankfully, the sales of Galaxy S III actually increased by 15% after the iPhone 5 was launched.

HTC, sadly, was not as lucky as Samsung. The company was on the receiving end of the 5 millon release weekend sales figure of the iPhone 5 launch, with its profits dipping by a whopping 79% (YoY) for the recently ended third quarter. According to the unaudited third quarter financial report of the company, it made a paltry profit of only $NT3.9 billion (133.1 million) with a total revenue of around NT$70.2 billion.

Below is the full press release from the company -:

Taoyuan, Taiwan – Octoboer 8, 2012 – HTC Corporation (TWSE: 2498), a global leader in mobile innovation and design, today announces unaudited consolidated results for 3Q 2012. For the third quarter of 2012, total revenues reached NT$70.2 billion. Unaudited operating income was NT$4.9  billion, net income before tax was NT$4.0 billion, net income after tax, excluding minority interest, was NT$3.9 billion, and unaudited earnings per share after tax were NT$4.70 based on 831,227
thousand weighted average number of shares.

HTC recently unveiled a couple of WP8 phones (8X and 8S) and a new flagship Android handset (One X+), which the company hopes will help gain some of its lost market share back from Apple and Samsung.

Samsung Makes $7.3 Billion Record Profit in Q3 2012

While the rest of the players in the smartphone market (except Apple, of course) may be struggling to make ends meet, Samsung is thriving, thanks to continuing record sales of its Galaxy smartphones.

Samsung reported a record quarterly profit of $7.3 billion, with strong sales of its TVs and Galaxy smartphones offsetting the decline in chip and screen sales to Apple. With the holiday season coming up, Samsung may report four straight record quarters, to make 2012 its best year yet.

It is expected to make an annual profit of more than $25 billion in 2012, even after a massive increase in marketing expenses and a huge legal bill following its legal battles against Apple.

Samsung’s mobile division may have contributed to more than two thirds of its total profit in the last quarter. Its record march depends primarily on whether or not it’s able to continue to launch new hit smartphones and compete with the likes of Apple’s iPhone 5 in the market as well as in courts.

It’ll be launching the Galaxy Note II as well as a budget version of the Galaxy S III which should help it shore up more sales in the holiday season.

Samsung will be reporting its full results on October 26.

via Reuters

Zynga Has a Bad Q3; Writes Down OMGPOP Assets

Zynga is expected to reveal its earnings for Q3 2012 on October 24, but it gave investors a sneak peek by announcing preliminary financial results on Thursday.

It has projected revenue in the range of $300 to $305 million, with bookings down to $250 to $255 million for the quarter ended September 30, 2012. It also expects to book a net loss of around $90 to $105 million. Most of the loss can be attributed to a asset impairment charge related to its acquisition of OMGPOP, the maker of Draw Something, for about $200 million earlier this year.

Following the worse than expected quarter, Zynga has also lowered its full year projections, with projected 2012 bookings down to $1.085 to $1.100 billion, primarily due to reduced expectations for certain games, and delays in launching other new ones.

Mark Pincus, Zynga’s CEO, said:

“The third quarter of 2012 continued to be challenging and, while many of our games performed to plan, as a whole we did not execute to our satisfaction. We’re addressing these near-term challenges by implementing targeted cost reductions in the fourth quarter and rationalizing our product R&D pipeline to reflect our strategic priorities. At the same time, we are continuing to invest in our mobile business where we have one of the strongest positions in the industry. These actions support our strategy to transition from being a first party web game developer to a multiplatform game network. We remain optimistic about the opportunity for social gaming and the power of our player network of 311 million monthly active users. When we offer our players highly engaging content, they respond. FarmVille2 has been our most successful launch since CastleVille in terms of daily bookings, and we now offer 3 of the top 5 most popular mobile games in the U.S. in terms of time spent according to Nielsen.”

Zynga’s stock price dropped nearly 12% following the press release, bringing its market cap down to $1.9 billion, nearly 15% of its all time high.

via Zynga

Oracle Reports Q1FY13 Earnings; $8.2 Billion in Revenue, $2 Billion in Net Profit

Oracle has announced its earnings for Q1FY13, with total revenues down 2% to around $8.2 billion. While software revenues grew marginally, the hardware and services revenue was down significantly, weighing down on overall revenue growth.

Its operating income increased 7% to more than $2.8 billion, while its net income jumped up to $2 billion.

With its new acquisitions and product roadmap, Oracle seems to be focused on dominating the cloud-based software space.

Oracle CEO, Larry Ellison, said:

“A little more than a week from now we will announce lots of enhancements to the Oracle Cloud. There are more CRM, ERP and HCM applications as a service, and more Oracle database, Java and social network platform services. Our new infrastructure as a service is available in the Oracle Cloud and as a private cloud in our customers’ data center, with the unique ability to move applications and services back and forth between the two.”

Oracle’s cash, cash equivalents, and marketable securities have increased to almost $31.5 billion. Its operating cash flow this quarter was up to $14 billion.

Oracle President, Mark Hurd, said:

“Exadata, Exalogic, Exalytics and our other engineered systems grew more than 100% in the quarter. For the full year, we expect to double engineered systems sales to well over $1 billion. Oracle’s new cloud business is also approaching a $1 billion annual run rate. These two businesses will drive Oracle’s growth for years to come.”

For now, it seems that cloud-based enterprise software and engineered systems will continue to drive revenue growth for Oracle in the coming years.

via Oracle – SEC