Tag Archives: Earnings

Microsoft Reports $17.4 Billion Quarterly Revenue; Office and Server Sales Grow Most

Microsoft announced its earnings for the quarter ended March 31, 2012, with revenue of $17.41 billion and operating income of $6.37 billion, a 6% and 12% year-over-year increase respectively. Its net income was $5.11 billion.

The Server & Tools business posted the highest revenue growth, with sales growing to $4.57 billion, up 14% over last year. Microsoft’s primary money maker – the Business division which is comprised of Office and Dynamics – saw revenue grow 9% to $5.81 billion.

On the other hand, its Windows division saw revenue growth slow down to just 4%, with revenue of $4.62 billion. It is expected to see a massive jump once Microsoft launches Windows 8 in late 2012.

The Online Services division, comprised of Bing, MSN and Microsoft’s other online properties, posted a loss yet again, losing $300 million on revenue of $707 million. At this rate, it should become profitable in the coming years.

Entertainment and Devices – Xbox, Kinect, Windows Phone and Zune – posted a 16% decline in sales, which dropped to just $1.62 billion, as the holiday sales period wore off, and the Xbox 360 enters its 7th year. Microsoft may launch the next Xbox in 2013 or 2014, which should lead to a sales boost.

“We’re driving toward exciting launches across the entire company, while delivering strong financial results,” said Steve Ballmer, chief executive officer at Microsoft. “With the upcoming release of new Windows 8 PCs and tablets, the next version of Office, and a wide array of products and services for the enterprise and consumers, we will be delivering exceptional value to all our customers in the year ahead.”

With Windows 8, Office 15 and the next Xbox launching in 2012 and 2013, the next couple of years are going be be very important for Microsoft.

Yahoo Announces Earnings for Q1 2012

Yahoo reported its financials for Q1 2012, with a slight increase in net revenue, which was $1.077 billion, up 1% year-over-year. However, its income from operations declined to $169 million, a 11% decline over last year. While its display ad revenue saw a 4% decline, its search revenue was up 8%.

Despite the decline in operating income, Yahoo’s net income actually jumped 27%, primarily because of earnings due to its equity interests in Alibaba and Yahoo Japan, which are currently valued at more than its actual operations.

Anyway, Yahoo plans to focus on its core digital content business in the coming days, and hopes to better monetize its massive audience. It has established a new structure around three groups – Consumer, Technology and Regions – bringing resources closer to users and advertisers.

It has also laid off a significant portion of its total workforce, to cut costs and save nearly $375 million in the next year.

In the last couple of weeks, it also sued Facebook in the hopes of making a quick buck before its IPO, and is looking to monetize its stake in Alibaba.

Yahoo also announced that it will be shutting down nearly 50 products that don’t contribute meaningfully to its revenue, as part of its restructuring effort. Besides its media content and social endeavors, it will also try to leverage its vast troves of user data to focus on its commerce business and generate additional revenue by providing better ROI to advertisers.

Scott Thompson is moving fast to create a new, leaner, meaner Yahoo. Whether or not his bets pay off is something we’ll know only in the next couple of years.

Google Has a Great Q1 2012; Founders Want to Split Stock for Greater Control

Google announced its earnings for Q1 2012, posting gross revenues of $10.65 billion, up 24% year-over-year. Its traffic acquisition costs (TAC) remained stable at 25% of the gross revenue. Google saw net income of $2.89 billion this quarter.

Its revenue growth was driven by a 39% increase in aggregate paid clicks, which compensated for a 12% decline in the average cost-per-click. This trend is expected to continue as mobile search advertising forms a large piece of the search advertising pie that Google commands the largest share of.

Its cash, cash equivalents and marketable securities now add up to $49.3 billion, nearly half of what Apple’s reserves were at the end of 2011.

While the numbers were good, they weren’t the most interesting part of the earnings release.

Google’s management team is trying to float a new class of stock with no voting rights. It will be offered as a stock dividend to existing shareholders — effectively a stock split — but will enable Google’s founders to retain their current level of control, which is slowly being diluted away due to stock based compensation for employees and acquisitions where part of the payoff is in Google stock.

Google already has a dual class stock structure, with class A and class B shares. Class B shares have 10 votes per share, while class A shares have only one. The new class C shares will have no voting rights at all. They will trade separately from normal Google stock, possibly at a discount due to the lack of voting rights.

With this move, Google’s founders will have more control over the destiny of Google, and be able to focus on long-term plays without having to make short-sighted moves to increase short-term profit.

Zynga Has a Great Q4; New Games Take Off

Zynga, the largest social gaming company in the world, just reported its earnings for Q4 2011. It generated revenue of $311.23 million in Q4 to come up with a total revenue of $1.14 billion in 2011. It saw positive cash flow in 2011, but in terms of GAAP earnings, it recorded a net loss of $404.32 million. The loss was primarily due to the issue of new stock following its IPO in November, which led to a huge jump in stock based compensation expenses.

Founder and CEO Mark Pincus said, “2011 was another milestone year for Zynga’s mission of connecting the world through games. We are seeing social games and more broadly play become one of the most popular pastimes on web and mobile. Zynga set new records in the year in terms of audience size, revenues and bookings. We saw great momentum in mobile and advertising and ended the year with a strong pipeline of new games. We are excited about the opportunities in front of us to continue delighting our current players and to bring play to millions of new people.”

Zynga’s user growth numbers look quite encouraging. Its monthly active users increased from 227 million in Q3 2011 to 240 million in Q4 2011. It saw a similar increase in daily active user numbers, which went up to 48 million this quarter. It still had the top 5 most played games on Facebook in Q4 2011, with its new release – CastleVille – being one of them.

It even introduced a new metric in the earnings – monthly unique payers. The monthly unique payers increased from 2.6 million in Q3 2011 to 2.9 million in Q4 2011, which means that more and more players are paying for virtual goods in Zynga’s games.

It launched 20 new titles in 2011 – 12 of them on web based platforms like Facebook and Google+, and 8 on mobile platforms like iOS and Android.

In its earnings call, it also revealed that it was looking to enter the online gambling space, which could positively impact its revenues in the coming years. It also stated that it had been building up its own cloud infrastructure to power its games, which now powers more than 80% of its total capacity.

Nokia Reports Q4 2011 Results; 1 Million Lumia Units Sold, Still Losing Money

Nokia has reported its earnings for the fourth quarter 2011. While its new strategy finally seems to be paying off a bit, it is still very much in the red when it comes to profits. It posted a massive operating loss of €954 million, around $1.3 billion. Its sales have improved a bit over Q3 2011, up 11% with net revenues of €10 billion ($13.2 billion). It is still worse off compared to where it was last year, but things seem to be looking up compared to last quarter. Its cash reserves have dropped by around €1.4 billion ($1.84 billion), compared to Q4 2010.

Nokia also announced some interesting numbers which reveal some important information about its Windows Phone strategy. It has sold over 1 million Lumia units to date, and received $250 million from Microsoft in Q4 2011, for using Windows Phone.

While the number is hardly impressive compared to Apple’s quarterly iPhone sales of 37 million units, it does indicate that Lumia is gaining at least some traction. The Lumia 900 also hogged most of the limelight at CES 2012, so the number should only improve going forward.

While it may be faltering in smartphones, Nokia remains the king of feature phones. It announced that it had sold more than 1.5 billion S40 handsets to date. Nokia announced that it expects to break even in Q1 2012, maybe even turn a small profit.

Check out the complete Nokia Q4 2011 results here: Nokia Q4 2011

Microsoft Had $17.37 Billion Revenue in Q4 2011; $69.94 Billion in FY2011

Microsoft has announced its Q4 results for the year ended June 30, 2011. Judging by the numbers, it looks like Microsoft has had a great quarter. It reported Q4 revenues of $17.37 billion, up 8% year on year. Its operating income grew to $6.17 billion, up 4% from Q4 2010, while its net income grew to $5.87 billion, an increase of 30%.

For the entire fiscal year 2011, Microsoft reported revenues of $69.94 billion, a 12% increase over FY 2010. Its operating and net income grew to $27.16 billion, and $23.15 billion, up 13% and 23% respectively.

“Throughout fiscal 2011, we delivered to market a strong lineup of products and services which translated into double-digit revenue growth, and operating margin expansion,said Peter Klein, Microsoft CFO. Our platform and cloud investments position us for long-term growth.”

Microsoft’s Business and Windows divisions are doing very well. Microsoft has sold over 100 million Office 2010 licenses and more than 400 million Windows 7 licenses. It successfully launched Office 365 and has a very good chance of dominating the cloud based productivity software market. Even its Server and Tools division is growing reasonably well, driving revenue growth. Though Bing’s U.S. market share is up to 14.4% now, the Online Services division is still bleeding money.

The Entertainment and Devices division has seen its revenue jump 30% in Q4 and 45% for the full year, thanks to the spectacular success of the Xbox 360, Kinect, and Xbox Live. Coming to Windows Phone 7, it doesn’t represent a significant portion of the revenues, but with Android mired in lawsuits, it is well positioned to become a leading platform in the coming years.

Check out: Microsoft’s 2011 Earnings Release

Nokia’s Q2 2011 Results Announced; I AM DISAPPOINT!

Nokia Q2 ResultsNokia used to be the number one smartphone maker in the world. It created the smartphone market in the late 90s and dominated it for years. But then, in 2007, Apple launched the iPhone. It redefined the entire category, and soon became the number one smartphone company in terms of sales, in the US. Trying to emulate Apple’s success in smartphones, Google launched the Android OS, and it soon dethroned Nokia’s Symbian as the leading smartphone platform worldwide.

Stephen Elop, the man who people call Microsoft’s trojan horse in Nokia, has been at the helm of Nokia for about a year now. He has been making some changes to Nokia’s strategy to make it a smartphone giant again, but they don’t seem to be working. Nokia has pledged allegiance to Microsoft’s Windows Phone 7 platform, sidelining Symbian and MeeGo in the process.

Today, Nokia released its Q2 2011 earnings report. Compared to Apple’s outstanding results, they are extremely disappointing.

Nokia has posted a €487 million operating loss, down €782 million from a profit of €295 million in Q2 2010. Its sales are down to €9.275 billion, from €10 billion in Q2 2010. While it had nearly €1 billion in cash last year, it now has €176 million in debt. Even its EPS is down to €0.06; a drop of nearly 45%. The sales of all its product divisions have been dropping; smartphone sales are down 32% while feature phone sales are down 20%. Apple sold more smartphones than Nokia, at a much higher profit margin. In other words, it is completely fucked.

Nokia hasn’t launched a single successful product this quarter, as it concentrates its efforts on the Windows Phone 7 devices it plans to launch soon. If it screws up its Windows Phone 7 launch, which I think is very probable, it will likely end up either dead, or will be acquired by Google, Microsoft or Apple for its enormous patent portfolio.

Interestingly, Nokia seems to have made nearly €430 million as patent licensing fees, most of which is probably from Apple, as part of a settlement in a patent lawsuit that Nokia won.

Nokia’s Q2 2011 Earnings Release