Dell Earnings: Revenue Drops on Decreased Desktop & Mobility Sales

Dell reported its earnings for Q2 FY13 today, with revenue declining 8% to around $14.5 billion and operating income dropping 21% to $0.9 billion. While its services revenue increased marginally, revenue from products declined nearly 10%. In the products business, storage, mobility and desktop devices saw the greatest decline in revenue.

It reported a net profit of $732 million, down 18% year-over-year, as sales declined and R&D expenses jumped nearly 27%.

Michael Dell, Chairman and CEO, said:

“We’re transforming our business, not for a quarter or a fiscal year, but to deliver differentiated customer value for the long term. We’re clear on our strategy and we’re building a leading portfolio of solutions to help our customers achieve their goals.”

Dell’s stock has dropped nearly 5% following the earnings release, as it also lowered its outlook for the coming quarters, and is currently trading near its 52-week low.

As the desktop market is expected to see a decline in growth in the coming years, Dell’s earnings will continue to be hit since desktop products account for a major portion of its overall sales. The launch of Windows 8 might offer some respite, but Dell’s earnings will be pressured not only by increasing competition in the desktop space, but also by the shift to mobile devices where it hardly has a significant presence.

via Dell – SEC

Groupon Q2 2012 Earnings; Revenues Grow 45%

Groupon announced its earnings for Q2 2012, with revenue improving 45% to $568 million, even after significant foreign exchange rate moves against it. Gross billings increased 38% to $1.29 billion, while operating income increased to $46.5 million.

Groupon’s North American revenues grew 66% while its international revenue growth was close to 30%. It also managed to bring its customer acquisition and marketing costs down significantly.

Mobile usage has continued to increase and adoption of its merchant tools also continues to rise, which should help it in its mission to become the “operating system” for local merchants.

Groupon ended the second quarter with its cash and cash equivalents standing at $1.12 billion.

Q2 2012 was the first quarter for Groupon with material direct revenue, generated through the sales of its own products and services. We expect that to become a sizable portion of its total revenue mix in the coming years.

Andrew Mason, CEO of Groupon, said:

“We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure. We’ve deepened our relationships with a growing base of merchants and customers worldwide, demonstrating progress as we work to unlock the opportunity in local commerce.”

Groupon’s stock crashed nearly 20% after it reported these numbers, and stands much below its IPO price.

via Groupon – SEC

LinkedIn Q2 2012 Earnings: Revenues Jump 90%

LinkedIn is one of the few internet stocks which hasn’t completely tanked below its IPO price, unlike recent disasters like Facebook, Zynga and Groupon.

It is trading at around $110, after receiving a boost right after it announced its earnings for the second quarter of 2012.

It had a pretty good quarter by all means, with revenue jumping 89% to $228 million. Its net income was around $2.8 million, and reported strong growth metrics.

Jeff Weiner, CEO of LinkedIn, said:

“LinkedIn had a strong second quarter with all of our key operating and financial metrics showing solid performance. Our ongoing investment in product innovation drove healthy engagement as measured by unique visiting members and member page views, and our three revenue streams all experienced significant growth.”

Revenue from Hiring Solutions, LinkedIn’s most valuable business, almost doubled to $122 million, while Marketing Solutions’ revenue increased 64% to $63 million. Premium Subscriptions’ revenue increased 82% to $44 million.

LinkedIn also made quite a few major advances in the last quarter. It launched its first iPad app, and completely revamped the design for its service. It also rolled out its new social news product, LinkedIn Today. It launched features like Targeted Status Updates, as well as Follower Statistics.

LinkedIn ended the quarter with nearly $616 million in cash and short term investments.

It also revised its earnings guidance for FY 2012 upwards, approaching nearly $925 million.

via LinkedIn – SEC

Yelp Q2 Earnings: Revenue Grows 67% to $33 Million

Yelp announced its earnings for Q2 2012 on August 1. Its revenue grew to $32.7 million, up 67% year-over-year. It also posted a smaller net loss than expected ($2 million), and managed to post impressive growth metrics fueled by its international expansion. Its stock price jumped nearly 20% following the earnings release, and its now trading at nearly $22.

Yelp’s CEO, Jeremy Stoppelman said:

“Yelp’s second quarter performance highlights the underlying power of our model. By focusing almost singularly on cultivating rich, authentic local content, we have created a unique platform that is rapidly becoming the de facto local search engine for connecting consumers with great local businesses. We are now active in 90 Yelp markets around the world and are seeing an increase in our consumer engagement, especially on mobile, where their connection to local businesses is enhanced by the location-based capabilities of their mobile devices.”

Yelp’s cumulative reviews grew to more than 30 million, up more than 54% since Q2 2011. Its average monthly unique visitors also grew 52% to more than 78 million, while registered local business accounts more than doubled to 32,000.

It expanded into 8 new markets in Q2 2011, which brings its total global market presence to 90. Yelp’s mobile app continues to become an increasingly significant part of its business, as it logged nearly 7.2 million monthly unique mobile devices in Q2. It continues to add features to its mobile apps, and the integration with Apple in iOS 6 would only further boost its mobile usage. Yelp also tied up with Microsoft’s Bing to power local search on it.

Yelp ended the quarter with nearly $122.6 million in cash and cash equivalents. Its cash burn rate has decreased in the last couple of quarters, and it seems on track to turn a profit soon.

via Yelp – SEC

The New York Times Q2 Earnings: Revenues Flat at $515 Million, Digital Subscriptions Look Promising

NYT reported its earnings for the second quarter of 2012 on July 26, bang in the midst of the earnings season.

It posted revenues of $515 million with advertising contributing nearly $244 million and its traditional print circulation business contributing $233 million to the mix. It managed to grow its revenues only by a marginal 0.6% this quarter, which is what usually happens when you operate in a declining industry trying to make sense of how the internet works.

It posted an operating loss of $143 million, and a net loss of $88 million. While its print ad revenues continue to decline, it isn’t doing very well on the digital ad front either. Circulation revenue growth is being driven primarily by its increasing traction in digital subscriptions. It managed to increase its digital subscriber base to 532,000, up 13% over the last sequential quarter.

NYT’s CEO said:

“Our second-quarter results reflect our ongoing strides in repositioning the Times Company for an increasingly multiplatform future. The growth in operating profit, excluding depreciation, amortization, severance and special items, was largely driven by continued strength in circulation revenues, which offset advertising revenue declines and led to overall revenue growth of about 1 percent. Total Company circulation revenues rose 8 percent, led by the nearly 11 percent growth at The New York Times Media Group as we continued to expand our digital subscription base and grow our robust consumer revenue stream.

At quarter end, total paid digital subscriptions across the Company were approximately 532,000, up 13 percent from 472,000 as of March 18, 2012, which was the one-year anniversary of NYTimes.com’s digital subscription launch. The growth in paid digital subscriptions benefited from our decision to move the gate on NYTimes.com from 20 to 10 free articles a month, and from a host of marketing and product initiatives that we have been rolling out this year.

While the advertising market remains challenging, the rate of decline for the Company’s total advertising revenues moderated, due primarily to improved digital advertising revenue trends, compared with first-quarter 2012 levels. This was mainly due to more favorable advertising trends at the About Group, particularly for cost-per-click advertising.”

via NYT – SEC

Samsung Has a Record Q2; Operating Profits of $5.9 Billion

Samsung has announced its earnings for Q2 2012, with a record profit of $5.9 billion, driven primarily by its roaringly successful smartphone business. Its operating profit jumped almost 80% compared to last year, as it overtook Nokia to become the top mobile phone maker in the world. Its revenues jumped to $41.8 billion, up 21% year-over-year.

Samsung sold nearly 50 million smartphones in Q2, which is nearly double the number of iPhones that Apple sold last quarter. The Galaxy S III, its latest top smartphone, has sold more than 10 million units already, and is on track to sell a lot more. Even the Galaxy Note continues to see strong sales, as do most of its other mobile device offerings.

Samsung’s operating profit for the mobile communications division jumped nearly 145%, more than offsetting a 38% decline in the operating profit in its semiconductor business. Mobile revenues jumped nearly 75%.

Samsung ended the quarter with nearly $20 billion in cash reserves.

While Nokia, HTC, LG, Motorola and RIM are bleeding to death and posting losses every quarter, Apple and Samsung are rolling in the dough.

Check out the complete results at Samsung Investor Relations – Samsung Q2 2012 Results

Amazon Reports Q2 Earnings; Revenues Grow, Operating Margins Drop

Amazon has reported its earnings for the second quarter of 2012, with revenue growing 29% to $12.83 billion, but operating profit and net profit declining to $107 million and $7 million respectively. Amazon’s operating margin reduced to less than 1% in the last quarter.

Amazon’s cash reserves (cash, cash equivalents and marketable securities) declined to around $5 billion by the end of Q2 2012.

Amazon generated close to $4.12 billion from its Media business, and $8.16 billion from its Electronics and general merchandise business. The remainder was generated from sources like AWS and other miscellaneous activities. Media revenues grew at nearly 13%, while EGM revenues grew at a scorching 38%.

Interestingly, all of Amazon’s top 10 selling items were digital products — Kindle, Kindle books and accessories, which suggest a clear trend.

Bezos seems to be very optimistic about Amazon Prime. Here’s his official statement on one of Amazon’s major revenue engines:

“Amazon Prime is now the best bargain in the history of shopping – that is not hyperbole,” said Jeff Bezos, founder and CEO of Amazon.com. “We successfully launched Prime seven years ago with free unlimited two-day shipping on one million items. The price of annual membership was $79. Since then, Prime selection has grown to 15 million items. We’ve also added 18,000 movies and TV episodes available for unlimited streaming. And we’ve added the Kindle Owners’ Lending Library – borrow 170,000 books for free with no due dates – it even includes all seven Harry Potter books. What hasn’t changed since we launched Prime? The price. It’s still $79. We’re very grateful to our Prime members, and thank them whole-heartedly for the business and for the word-of-mouth that has made this program grow.”

via Amazon – SEC

Sprint Posts Q2 2012 Earnings; $8.84 Billion in Revenues, $1.37 Billion in Net Losses

After Verizon and AT&T earlier this week, Sprint released its earnings for Q2 2012 today. It posted net operating revenues of $8.84 billion, with an operating loss of $629 million and a net loss of $1.37 billion. Its losses just keep on mounting — compared to Q2 2011, its losses have increased more than 60%.

It sold around 1.5 million iPhones in Q2, with 40% of them attributed to new postpaid customers. In addition to the iPhone, it also launched four top Android phones — Galaxy Nexus, LG Viper 4G LTE, HTC EVO 4G LTE and the Samsung Galaxy S III in Q2.

It is currently focusing on a major network overhaul — Network Vision — which would account for most of its increased expenses and resulting losses. It launched 4G LTE network support in 5 markets and 15 cities in July, and will continue to expand it in the coming quarters.

On the plus side, it has been able to improve its postpaid ARPU and churn levels to their best levels yet. It served more than 56 million customers in Q2 (32.6 million postpaid, 15.4 million prepaid, and 8.4 million wholesale & affiliate subscribers.)

While Nextel continues to report net subscriber losses, Sprint is trying its best to add postpaid and prepaid subscribers to its network. It lost 246,000 net postpaid and gained 141,000 net prepaid subscribers in the last quarter, the losses being primarily due to Nextel.

It reported $7.2 billion in wireless service revenues and $995 million in wireline service revenues. We expect wireless revenues to continue to grow as a proportion of its overall revenues.

Sprint’s cash reserves increased to around $6.8 billion, inclusive of short term investments.

Though it posted massive losses, its revenue beat consensus estimates and the future looks a bit more rosy, so its stock jumped nearly 20% following the earnings release, to $4.

via Sprint – SEC

Zynga Posts Dreary Earnings in Q2 2012; Stock Down 40%

Zynga posted its earnings for Q2 2012 today, and it has caused a major bloodbath for its share price, which is down nearly 40% since the earnings release.

Zynga reported revenue of $332 million, up 19% year-over-year, but bookings of $302 million, which have actually decreased sequentially from Q1 2012. It also lowered its earnings outlook for the next quarter, which spooked analysts even more. It posted a net loss of $22.8 million. Of its total revenue, it generated around $292 million from virtual transactions in games, and $41 million from advertising.

Mark Pincus, CEO of Zynga, said:

“The company achieved some significant milestones in the quarter including the launch of Bubble Safari, which is now the number one arcade game on Facebook, and the launch of The Ville, now the number two game behind Zynga Poker. Our advertising business continued to show strong growth with revenue up 170% year-over-year. Our games reached record audiences, achieving over 300 million monthly active users. We grew our mobile footprint five-fold in the year to 33 million daily active users making Zynga the largest mobile gaming network,” said Mark Pincus CEO and Founder, Zynga. “We also faced new short-term challenges which led to a sequential decline in bookings. Despite this, we’re optimistic about the long-term growth prospects on mobile where we have a window of opportunity to drive the same kind of social gaming revolution that we enabled on the web.”

Zynga managed to grow its user metrics significantly in Q2, though most of it was due to acquisitions, and not organic growth.

Zynga’s monthly active users increased 34% to 306 million, while its daily active users increased 23% to 72 million. It also managed to increase the number of paying users to 4.1 million in Q2, which is a good sign for its monetization potential. Average bookings per user declined 10% though, to $0.046, which means that Zynga is generating less revenue per user than it used to.

Q2 was a very eventful quarter for Zynga. It launched 6 new games, launched the Zynga with Friends network, and made progress with its online gambling initiatives. It will likely roll out its first online gambling game internationally in the first half of 2013.

It ended the quarter with roughly $1.6 billion in cash, cash equivalents, and short term and long term marketable securities.

via Zynga – SEC

LG Q2 2012 Earnings: Revenue Drops to $11.2 Billion, Profit Jumps 46% to $138 Million

LG Electronics was yet another company which reported its earnings this week. It reported a 46% increase in its net profits year-over-year. Net profits increased to $138 million but revenues declined to $11.16 billion, down 10.6% year-over-year primarily because of declining phone sales.

LG posted a total operating profit of around $303 million, most of which came from its home entertainment division — around $187.5 million. Though division sales declined to $4.76 billion, down 5.8% year over year, margins increased due to improved supply chain management. Continued sales of LG’s Cinema 3D TVs made it the global leader in the 3D TV segment.

LG’s mobile division, on the other hand, posted a loss of around $50 million, with revenues declining 28.5% to $2 billion. The loss was primarily due to increased marketing expenses following the launch of new models. Smartphones now account for 44% of unit sales, and will only increase going forward.

LG’s home appliance division posted an operating profit of around $143 million, nearly triple last year’s profit due to a better product mix and improved cost efficiencies. Developing market growth also pushed revenues up to $2.5 billion.

Its AC and energy solutions division posted an operating profit of $61 million, up 17% over last year, with revenues declining to $1.28 billion.

Despite declining revenues, LG has been able to prop up its operating margins by focusing on profitability rather than sales.

What we are most concerned about is LG’s mobile division, which has been hammered not only by the iPhone, but also by Android devices from Samsung, HTC, Motorola, and others. Hopefully, it will make a comeback in the coming quarters.

via LG