Qualcomm Q1 2013 earnings: $1.91 billion in profit on revenues of $6 billion

The folks in San Diego are making it rain once again, as Qualcomm has just announced its earnings for the quarter with $6 billion in revenues, which represents a 29 percent year-over-year increase and a new record for the firm. It seems the company’s Snapdragon chips are everywhere you look these days, and it should come as no surprise that Qualcomm also hauled in a profit of $1.91 billion, which is a 36 percent hike over the previous year. Seeing that the company is so well off, it’s also announced a cash dividend payment of $428 million that will go back to shareholders, along with stock repurchases in the amount of $250 million. In case you were wondering, Qualcomm managed to push 182 million of its SoC’s out the door during Q1, which represents a 17 percent year-over-year increase. With the Snapdragon 800 due by mid-year, we’ve a feeling that it’ll keep raining in San Diego for some time — even if the nice weather says otherwise.

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Source: Qualcomm Q1 2013 Earnings (PDF)

Lenovo’s Q3 sees sales reach $9.4 billion, profits rise to $200 million

DNP Lenovo Q3 results

While big chunks of the industry may be feeling gloomy, the artist formerly known as IBM’s PC Division keeps on raking in money. Lenovo’s third quarter earnings report reveals that the company sold $9.4 billion worth of hardware, keeping $200 million of that back for itself in net profit. It’s also seen its Chinese smartphone business turn a profit, and is now eyeing Russia as the next land ripe for conquering. Lenovo’s corporate mattress is so stuffed that it probably smells of money, as the company has squirreled away $4.2 billion for a rainy day, or, you know, something else.

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Source: Lenovo

Amazon posts $21.27 billion in 2012 Q4 revenues, makes tinier profit of $97 million

STUB Amazon posts $22 billion in 2012 Q4 revenues, makes net profit  loss of $TKTK million

It’s still the same old story, really. Amazon pulls in revenues equal to a small nation’s GDP and makes a small profit for itself in the process. In this case, particularly small. Jeff Bezos’ little company that could has posted fourth-quarter turnover of $21.27 billion, a 22 percent increase, but a net profit of $97 million that’s down 45 percent from a year earlier. The discrepancy is attributed to a shift in reading habits that Bezos claims the company was expecting. Kindle downloads have been growing quickly, but old-fashioned paper book sales grew just 5 percent in December — the lowest in company history, Bezos says. That’s not surprising when you look at Amazon’s bestseller charts, as the Kindle Fire HD and three other Kindle devices led the ranks. Most of the concern centers on the future. Amazon expects its operating income to dip from $405 million to anywhere between a $285 million loss and a $65 million profit, which doesn’t exactly set a high bar for post-holiday performance.

Daniel Cooper contributed to this report.

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Amazon.com Announces Fourth Quarter Sales up 22% to $21.27 Billion
Operating income up 56% year-over-year – above high end of guidance

SEATTLE, Jan 29, 2013 (BUSINESS WIRE) — Amazon.com, Inc. AMZN +11.16% today announced financial results for its fourth quarter ended December 31, 2012.

Operating cash flow increased 7% to $4.18 billion for the trailing twelve months, compared with $3.90 billion for the trailing twelve months ended December 31, 2011. Free cash flow decreased 81% to $395 million for the trailing twelve months, compared with $2.09 billion for the trailing twelve months ended December 31, 2011. Free cash flow for the trailing twelve months ended December 31, 2012 includes fourth quarter cash outflows for purchases of corporate office space and property in Seattle, Washington, of $1.4 billion.

Common shares outstanding plus shares underlying stock-based awards totaled 470 million on December 31, 2012, compared with 468 million one year ago.

Net sales increased 22% to $21.27 billion in the fourth quarter, compared with $17.43 billion in fourth quarter 2011. Excluding the $178 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 23% compared with fourth quarter 2011.

Operating income increased 56% to $405 million in the fourth quarter, compared with $260 million in fourth quarter 2011. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $2 million.

Net income decreased 45% to $97 million in the fourth quarter, or $0.21 per diluted share, compared with $177 million, or $0.38 per diluted share, in fourth quarter 2011.

“We’re now seeing the transition we’ve been expecting,” said Jeff Bezos, founder and CEO of Amazon.com. “After 5 years, eBooks is a multi-billion dollar category for us and growing fast – up approximately 70% last year. In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%. We’re excited and very grateful to our customers for their response to Kindle and our ever expanding ecosystem and selection.”

Full Year 2012

Net sales increased 27% to $61.09 billion, compared with $48.08 billion in 2011. Excluding the $854 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales grew 29% compared with 2011.

Operating income decreased 22% to $676 million, compared with $862 million in 2011. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the year on operating income was $14 million.

Net loss was $39 million, or $0.09 per diluted share, compared with net income of $631 million, or $1.37 per diluted share, in 2011.

Highlights

— For the second year in a row, Amazon’s tablet was the most popular item for customers – Kindle Fire HD continued its run as the #1 best-selling, most gifted, and most wished for product across the millions of items available on Amazon worldwide. At year-end, Kindle Fire HD, Kindle Fire, Kindle Paperwhite and Kindle held the top four spots on the Amazon worldwide best seller charts since launch.

— Amazon announced the launch of AutoRip, a new service that gives customers free MP3 versions of CDs they purchase from Amazon. Additionally, customers who have purchased AutoRip CDs at any time since Amazon first opened its Music Store in 1998 will find MP3 versions of those albums in their Cloud Player libraries – also automatically and for free.

— Amazon introduced Kindle FreeTime Unlimited, bringing together for the first time all of the types of content kids and parents love – books, games, educational apps, movies and TV shows – into one simple, unlimited, easy-to-use service for kids ages 3-8.

— Amazon’s digital media selection has grown to over 23 million movies, TV shows, songs, magazines, books, audiobooks, and popular apps and games in 2012, an increase from 19 million at year-end 2011.

— Amazon.com announced new licensing agreements with Turner Broadcasting, Warner Bros. Domestic Television Distribution, and A+E Networks, for popular television series including Falling Skies, The Closer, Pawn Stars, Storage Wars, and Dance Moms, expanding its catalog of title offerings for Prime Instant Video to more than 36,000 movies and television episodes.

— Amazon launched Kindle Stores for Brazil, Canada, China, and Japan, with a large selection of the most popular books, including thousands of local-language books.

— Amazon announced that 23 KDP authors each sold over 250,000 copies of their books in 2012, and that over 500 KDP Select books have reached the top 100 Kindle best seller lists around the world.

— Amazon announced that for the eighth consecutive year, the company ranks #1 in customer satisfaction during the holiday shopping season according to the ForeSee annual Holiday E-Retail Satisfaction Index. ForeSee surveyed over 24,000 customers between Thanksgiving and Christmas, asking them to rate their satisfaction with the top 100 retailers. For the second year in a row, Amazon’s score of 88 is the highest ever attained by any retailer in the study.

— Amazon Web Services (AWS) announced the launch of its newest Asia Pacific Region in Sydney, Australia, now available for multiple services including Amazon Elastic Compute Cloud (EC2), Amazon Simple Storage Service (S3), and Amazon Relational Database Service (RDS). Sydney joins Singapore and Tokyo as the third Region in Asia Pacific and the ninth Region worldwide.

— AWS announced that SAP Business Suite is now certified to run on the AWS cloud platform. Enterprises running SAP Business Suite can now leverage the on-demand, pay as you go AWS platform to support thousands of concurrent users in production without making costly capital expenditures for their underlying infrastructure. AWS also announced that SAP HANA, SAP’s in-memory database and platform, is certified to run on AWS and is available for purchase via AWS Marketplace.

— AWS continued its rapid pace of innovation by launching 159 new services and features in 2012. This is nearly double the services and features launched in 2011.

— AWS has lowered prices 24 times since it launched in 2006, including 10 price reductions in 2012.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of January 29, 2013. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

First Quarter 2013 Guidance

— Net sales are expected to be between $15.0 billion and $16.6 billion, or to grow between 14% and 26% compared with first quarter 2012.

— Operating income (loss) is expected to be between $(285) million and $65 million, compared to $192 million in the prior year period.

— This guidance includes approximately $285 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions or investments are concluded and that there are no further revisions to stock-based compensation estimates.

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at www.amazon.com/ir . This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment and data center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains and develops commercial agreements, acquisitions and strategic transactions, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services and technologies, system interruptions, government regulation and taxation, payments and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission (“SEC”), including its most recent Annual Report on Form 10-K and subsequent filings.

Our investor relations website is www.amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases and social media postings.

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Samsung reports $8.27 billion in profits for Q4 2012

As Samsung predicted, Q4 2012 was another big one for the company with 8.84 trillion won ($8.27 billion) in operating profits, around double what it reported for the same period back in 2011. Overall revenue was also up, showing a gain of 18.5 percent from the same period last year for a total of 56.06 trillion won ($52.04 billion.) The company reported “strong” sales of its tablets and smartphones, specifically calling out its Galaxy S III and Galaxy Note II, which last seen crashing through the 30 million and 5 million sold barriers, respectively. If you were hoping for a Galaxy S IV preview, it won’t be found here, although Samsung expects demand for replacements and the expansion of LTE to drive sales, the anticipated seasonal drop in sales in Q1 suggests we won’t see a new model right away.

For its TVs, Samsung claimed overall demand was flat from last year, however a focus on higher end LED models drove higher profits. Samsung sees the 60-inch and higher market growing in 2013, however Q1 sales are expected to be slow before the new models are introduced. Samsung is also a major chip maker, and it reported weak demand for PC RAM, but growth in the server and mobile markets. Hit the source link to check out the PDF yourself or check out the press release after the break for more details. We didn’t learn anything particularly illuminating on the conference call, however executives believe there are more surprises left in the smartphone market for innovative companies like Samsung — take from that what you will.

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Samsung Electronics Announces Earnings for Fourth Quarter in 2012 on 4Q consolidated operating profit reaches 8.84 trillion won on revenues of 56.06 trillion won

SEOUL, Korea – January 25, 2013 – Samsung Electronics Co., Ltd. today announced revenues of 56.06 trillion Korean won on a consolidated basis for the fourth quarter ended December 31, 2012, a 7-percent increase quarter-on-quarter. Consolidated operating profit for the quarter hit 8.84 trillion won, representing a 10-percent increase on-quarter, while consolidated net profit for the same quarter was 7.04 trillion won.

The full-year 2012 operating profit was 29.05 trillion won on revenue of 201.10 trillion won.

In its earnings guidance disclosed on January 8, Samsung estimated fourth quarter consolidated revenues would reach approximately 56 trillion won with consolidated operating profit of approximately 8.8 trillion won.

Highlighting the quarterly performance, Mobile Communications generated quarterly revenues of 27.23 trillion won, a 4-percent increase compared with the previous quarter. The growth was mainly driven by solid sales of Samsung’s GALAXY S IIl and GALAXY Note ll. All told, operating profit for IT & Mobile Communications, which encompasses four business units including Mobile Communications, was 5.44 trillion won on revenues of 31.32 trillion won.

“Despite uncertainties in Europe and concerns over the U.S. fiscal cliff creating a difficult business environment, we did our best this quarter to achieve strong earnings based on a strategic focus on differentiated and high value-added products as well as our technological competitiveness,” said Robert Yi, Senior Vice President and Head of Investor Relations.

“Heading into this year, we are expecting a slow recovery in the component business due to reduced capital expenditures, while competition in the set business will intensify further as demand slows and the mid- to low-end market expands,” he added. Mr. Yi also expressed caution over the continued strength of the Korean won in 2013.

Samsung’s standout lineup of LED TVs, including premium models targeting advanced markets and TVs tailored to emerging markets, has also improved quarter-on-quarter earnings. Although demand for home appliances retreated in the December quarter due to a tepid global economy, Samsung saw increased sales of high-end refrigerators and washers in the U.S. and in European markets.

On the components business side, demand for PC DRAM remained weak but growth of high value-added products such as server and mobile DRAM was constant due to increased sales of mobile devices. While the Semiconductor Business landed profits in the quarter, the Display Panel segment struggled, as demand for IT panels for notebooks and monitors remained slow. On the other hand, profitability in LCD panels for TVs and OLED panels for smartphones prevented wider losses.

As for this year’s capital expenditure, the size of investment is expected to be similar to that of 2012’s.The weakening global economic recovery and looming market uncertainties are anticipated to weigh on plans for investment and performance this year, but despite global economic jitters, Samsung will respond to the market’s ebb and flow with a capex plan that is flexible in manner.

Differentiated Product Mix to Alleviate Chip Supply Squeeze

Samsung’s Semiconductor Businesses – including Memory and System LSI – posted consolidated 9.59 trillion won in revenue, a 10-percent hike from a quarter earlier. The Memory chip unit accounted for 5.33 trillion won in earnings and with the logic chip unit yielded 1.42 trillion won in operating profits, up 39 percent on-quarter

The Semiconductor Business sustained profitability in the quarter, amid weak market demand, thanks to a mix of high-margin products such as servers and Solid State Drives (SSDs) coupled with differentiated 20-nanometer class NAND flash chips. A competitive edge in mobile application processors for smartphones and tablet PCs also contributed to the bottom line.

Looking ahead, demand for memory chips is expected to be stifled in the first quarter, due to the seasonably weak demand for PCs and mobile devices. However, for the remainder of 2013, high value-added DRAM for mobile devices and servers will sustain profitability. Demand for logic products and NAND solutions including SSDs will remain strong throughout the year, as the industry puts greater emphasis on devices with higher capacity, greater processing power and mobility.

High-End Panels Secure Stability

The Display Panel Business recorded an operating profit of 1.11 trillion won on revenue of 7.75 trillion won in the fourth quarter. This represented a 5-percent decline in profits compared with the previous quarter but was up from the corresponding quarter of 2011.

Despite slower-than-expected economic recovery in developed markets, panel demand in China and emerging economies remained favorable in the quarter. This was led by solid sales of TV and tablet panels which offset the slowdown in notebook and monitor panel demand.

Samsung was able to secure stable growth for the quarter with an improved product mix and strengthened sales of high-end panels. Sales of LED and narrow bezel panels for premium TVs continued to grow, although the company’s TV panel sales dropped in the mid single-digit percentage range from the same period last year. However, increased sales of tablet panels as well as OLED panels for premium smartphones contributed to steady growth.

Looking ahead to 2013, the company expects the market for large-size TV panels, those over 60 inches in size, to grow. Strong sales of tablet panels are also forecast to continue throughout the year. For the first quarter, however, panel demand is expected to be adversely affected by off-peak seasonality before recovering in March with new TV and tablet product launches by manufactures.

Emerging Markets, a Silver Lining

The IT & Mobile Communications – comprised of Mobile Communications, Telecommunication Systems, Digital Imaging and Media Solution Center businesses – posted operating profits of 5.44 trillion won on 31.32 trillion won in revenue for the period. Out of the total IM earnings, the handset-making unit claimed 27.23 trillion won in revenue in the October-December quarter.

Samsung led gains with its full lineup of entry- to mid-level smartphones, expanded sales of tablet PCs and an increase in average selling price (ASP) from the previous quarter. The success was mainly brought on by strong sales of GALAXY S III and GALAXY Note II, which beat the popularity of their predecessors with record sales in record time.

In contrast, growth in network and IT-related IM businesses was stunted by heated pricing in the fourth quarter. On a brighter note, sales of Long Term Evolution (LTE) wireless broadband technology equipment continued gains while revenue from overseas sales of notebook PCs improved.

The furious growth spurt seen in the global smartphone market last year is expected to be pacified by intensifying price competition compounded by a slew of new products. In the first quarter, demand for smartphones in developed countries is expected to decelerate, while their emerging counterparts will see their markets escalate with the introduction of more affordable smartphones and a bigger appetite for tablet PCs throughout the year.

LED TVs Drive Growth

The Consumer Electronics Division – encompassing the Visual Display and Digital Appliances businesses – posted revenue of 13.95 trillion won for the quarter, up 20 percent quarter-on-quarter. The operating profit of 740 billion won amounted to an increase of 87 percent on the previous quarter and an increase on-year.

Lifted by peak season sales, the market experienced stronger demand for TV products in both developed and emerging markets as LED TV sales drove overall market growth of over 40 percent on-quarter. Backed by favorable market conditions, Samsung outperformed the market for LED TVs with on-quarter growth of more than 50 percent. This was achieved by the company’s differentiated strategy of focusing on premium models for developed economies and region-specific models in emerging markets.

Heading into 2013, sales will be led by emerging economies and the LED TV segment, which will expand its proportion of total TV sales into the mid-80 percent range. In the first quarter, the company expects off-peak seasonality to dampen on-quarter growth, although demand will be up in comparison with the previous year.

For the Digital Appliances market, although global economic conditions pushed demand down on the previous quarter, Samsung was able to expand sales of premium refrigerators and washing machines as the company experienced growth in developed markets such as Europe and the U.S. Looking ahead, the company expects moderate growth in emerging markets while low growth is likely to continue in developed economies.

About Samsung Electronics Co., Ltd.

Samsung Electronics Co., Ltd. is a global leader in consumer electronics and the core components that go into them. Through relentless innovation and discovery, we are transforming the worlds of televisions, smartphones, personal computers, printers, cameras, home appliances, medical devices, semiconductors and LED solutions. We employ 227,000 people across 75 countries with annual sales exceeding US$143 billion. Our goal is opening new possibilities for people everywhere. To discover more, please visit www.samsung.com.

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Source: Samsung Q4 2012 earnings, Samsung

AT&T lost $3.9 billion in Q4 2012, earned $7.3 billion profit for the year

AT&T boasts TKTK results for Q4 2012,

American telecommunications giant AT&T announced its Q4 2012 financial results this afternoon, which reflect $3.9 billion in losses for Ma Bell’s final fiscal quarter of last year. However, the company’s also posting “record smartphone sales” of 10.2 million last quarter — “the most by any US carrier,” it claims. As it’s Q4, the results for the full year are also in; AT&T revealed $7.3 billion in net income across the entirety of 2012. That’s what we’d call a marked change from last year’s losses.

In terms of phones, AT&T activated 8.6 million new iPhone customers (16 percent of which were totally new to the company), up 1 million over 2011’s Q4 and nearly double that of Q3 2012. No specific number is given on Android sign-ups, but AT&T’s calling it the “best-ever sales quarter for Android smartphones” — when those 8.6 million iPhones are subtracted from the overall Q4 2012 sales of phones (10 million), it’s not looking so good for non-Apple built devices. On the U-verse front, the latest lifetime subscriber numbers reflect 8 million TV and high-speed internet users, with 192K joining in Q4 2012.

Operating revenues just barely exceeded those of 2011, reaching $127.4 billion, offset by $114.4 billion in expenses (down $3 billion over 2011). Customer numbers also grew in 2012, by a healthy 1.086 million people, the vast majority of which are contract customers (approximately 70 percent). Needless to say, things seem to have gone pretty okay for AT&T in 2012, despite a rocky final quarter. Not too bad for the least loved mobile carrier in the US.

Update: This post originally reflected $3.9 billion in profit for Q4 2012, when it should’ve reflected losses. Please excuse our error!

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Microsoft reports Q2 2013 earnings: posts record revenue of $21.5 billion, $6.38 billion profit (update)

Microsoft reports Q2 2013 earnings posts record revenue of $215 billion, $638 billion profit

This isn’t the end of earnings season, but this is the final member of the unholy trinity. Microsoft is reporting that during the second quarter of its 2013 financial year it set a revenue record by raking in $21.5 billion. Of that $6.38 billion was pure profit, lining shareholder’s pockets to the tune of $0.76 per share. While EPS was down year-over-year, net income was up dramatically from $5.87 billion a year ago and $5.31 billion last quarter. The Windows division accounted for roughly $5.9 billion of Redmond’s revenues, up 24 percent from a year ago, largely thanks to the release of Windows 8. That division is also home to the Surface, which still hasn’t seemed to gain much traction with consumers. Interestingly, while Windows was surging, its business division was suffering a not inconsequential drop off — seeing revenues fall 10 percent to $5.7 billion year-over-year. But the Server & Tools department also helped offset some of those declines, with revenue jumping up 9 percent to $5.19 billion.

In a sign that it might be time for a bit of a console refresh, the Entertainment and Devices division saw revenues continue to sink, despite the strong holiday sales. While the $3.77 billion in revenue was a stark increase over Q1’s paltry $1.95 billion, it’s still a 7 percent fall from the same time period last year. Thankfully, its Online Services continued to grow, reaching $869 million in revenue — an 11 percent growth year-over-year, and a sign that it’s various web services aren’t sinking ships. Most notably ad revenue was up 15 percent thanks largely to an increase in revenue-per-search.

Revenue growth over Q2 2012 wasn’t huge, but it was certainly notable and net income didn’t drop dramatically. And, perhaps most importantly for investors, results were pretty much inline with Wall Street expectations. It’s also worth noting that some revenue has been deferred, $1.3 billion to be exact, thanks to various upgrade offers and video game deals — though, the company did report previously deferred revenues due to pre-sales of Windows 8. There’s PR after the break but, if you want to dig through all the detailed tables of financial data you’ll have to hit up the source link. And check back in for updates when the earnings call gets under way at 5:30PM ET.

Updates:

5:36PM CFO, Peter Klein says that 60 percent of computers worldwide are running Windows 7 while the company has managed to push out 60 million Windows 8 licenses.

5:40 Microsoft doesn’t seem particularly worried about the declining PC market as Windows revenues outpaced sales of x86 machines by a significant margin.

5:45 Windows Phone sales were four times what they were last year.

5:53 Microsoft stands by its story that Surface is “just one part of the Windows 8 story.” Though, it did say that it will “expand retail distribution and availability” so don’t expect the in-house slate to go quietly into that good night.

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Microsoft Reports Record Revenue of $21.5 Billion in Second Quarter
Strong business demand and key product launches drive record revenue.

REDMOND, Wash. – Jan. 24, 2013 – Microsoft Corp. today announced quarterly revenue of $21.46 billion for the quarter ended December 31, 2012. Operating income, net income, and diluted earnings per share for the quarter were $7.77 billion, $6.38 billion, and $0.76 per share.

These financial results reflect the net deferral of revenue for the Windows Upgrade Offer, Office Upgrade Offer and Pre-sales, and the Entertainment and Devices Division Video Game Deferral, partially offset by the recognition of previously deferred revenue for Windows 8 Pre-sales. The following table reconciles these financial results reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results. We have provided this non-GAAP financial information to aid investors in better understanding the company’s performance.

“Our big, bold ambition to reimagine Windows as well as launch Surface and Windows Phone 8 has sparked growing enthusiasm with our customers and unprecedented opportunity and creativity with our partners and developers,” said Steve Ballmer, chief executive officer at Microsoft. “With new Windows devices, including Surface Pro, and the new Office on the horizon, we’ll continue to drive excitement for the Windows ecosystem and deliver our software through devices and services people love and businesses need.”

The Windows Division posted revenue of $5.88 billion, a 24% increase from the prior year period. Adjusting for the net deferral of revenue for the Windows Upgrade Offer and the recognition of the previously deferred revenue from Windows 8 Pre-sales, Windows Division non-GAAP revenue increased 11% for the second quarter. Microsoft has sold over 60 million Windows 8 licenses to date.

“We saw strong growth in our enterprise business driven by multi-year commitments to the Microsoft platform, which positions us well for long-term growth,” said Peter Klein, chief financial officer at Microsoft. “Multi-year licensing revenue grew double-digits across Windows, Server & Tools, and the Microsoft Business Division.”

The Server & Tools business reported $5.19 billion of revenue, a 9% increase from the prior year period, driven by double-digit percentage revenue growth in SQL Server and System Center.

“We see strong momentum in our enterprise business. With the launch of SQL Server 2012 and Windows Server 2012, we continue to see healthy growth in our data platform and infrastructure businesses and win share from our competitors,” said Kevin Turner, chief operating officer at Microsoft. “With the coming launch of the new Office, we will provide a cloud-enabled suite of products that will deliver unparalleled productivity and flexibility.”

The Microsoft Business Division posted $5.69 billion of revenue, a 10% decrease from the prior year period. Adjusting for the impact of the Office Upgrade Offer and Pre-sales, Microsoft Business Division non-GAAP revenue increased 3% for the second quarter. Revenue from Microsoft’s productivity server offerings – collectively including Lync, SharePoint, and Exchange – continued double-digit percentage growth.

The Online Services Division reported revenue of $869 million, an 11% increase from the prior year period. Online advertising revenue grew 15% driven by an increase in revenue per search.

The Entertainment and Devices Division posted revenue of $3.77 billion, a decrease of 11% from the prior year period. Adjusting for the Video Game Deferral, the division’s non-GAAP revenue decreased 2% for the second quarter. Xbox continues to be the top-selling console in the United States. During the quarter, Microsoft launched Windows Phone 8 with a broad array of carriers and devices.

Business Outlook

Microsoft reaffirms fiscal year 2013 operating expense guidance of $30.3 billion to $30.9 billion.

Webcast Details

Peter Klein, chief financial officer, Frank Brod, chief accounting officer, and Chris Suh, general manager of Investor Relations, will host a conference call and webcast at 2:30 p.m. PST (5:30 p.m. EST) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/investor. The webcast will be available for replay through the close of business on Jan. 24, 2014.

Adjusted Financial Results and Non-GAAP Measures

For second quarter fiscal year 2013 GAAP revenue, operating income, and earnings per share growth included the net deferral of revenue for the Windows Upgrade Offer, the Office Upgrade Offer and Pre-sales, and the Entertainment and Devices Division Video Game Deferral, and the recognition of previously deferred revenue for Windows 8 Pre-sales. These items are defined in our Form 10-Q for the quarterly period ended December 31, 2012. In addition to these financial results reported in accordance with generally accepted accounting principles (GAAP), we have provided certain non-GAAP financial information to aid investors in better understanding the company’s performance. Presenting these measures without the impact of these items gives additional insight into operational performance and helps clarify trends affecting the company’s business. For comparability of reporting, management considers this information in conjunction with GAAP amounts in evaluating business performance. These non-GAAP financial measures should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

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Source: Microsoft

Nokia makes a 2012 Q4 profit of $585 million, sells 4.4 million Lumia handsets

Nokia's Q4 2012

From somewhere atop a Finnish mountain, Stephen Elop is both bellowing and whispering Nokia’s fourth quarter and full-year financials. The world’s former number one has finally made a quarterly profit, with the final three months of the year raking in $585.7 million. However, the baggage for those previous losses weighed low on the annual report, pinning the company to a $3 billion loss for its overall performance in 2012.

A big chunk of the quarterly profit came from the Nokia Siemens Networks infrastructure business, which chipped in with an operating profit of $334 million, while Nokia’s Device business contributed $367 million. Nokia confirmed that it shipped 4.4 million Lumia handsets and 2.2 million Symbian smartphones during this period and, while those numbers are still sliding, the higher margins on phones like the Lumia 920 have had a positive effect on the bottom line. America, however, still hasn’t fallen in love with the company’s phones, with sales increasing from 300,000 to 700,000 — but as of yet that’s hardly enough to say they’ve been a big hit.

On the upside, Nokia begins 2013 with a reasonably clean slate. It’s cashed out another $250 million donation from Microsoft and has seen its net cash reserves increase for the first time in over a year — up to $5.8 billion from $4.6 billion in the Autumn. The company has also decided not to grant a dividend to its shareholders for the first time in over a century as it hopes to keep adding to its corporate nest-egg.

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Source: Nokia (PDF)

Apple announces Q1 2013 earnings: record $54.5 billion in revenue, 47.8 million iPhones and 22.9 million iPads sold

Apple announces Q1 2013 earnings

Yesterday was Google, tomorrow is Microsoft — stuck in the middle? Apple. The unholy trinity of tech are going back-to-back-to-back with their quarterly earnings reports and Cupertino, faced with a steeply declining stock price, posted $54.5 billion in revenue — just shy of Wall Street estimates. Still, that represents a record quarter for the company which has been rumored to be facing diminished demand for its flagship iPhone. While it may be a while ’til we know for sure if demand for the handset is tapering off, we can report that the 47.8 million iPhones sold in Q1 of 2013 represents a new high water mark. While revenues were a bit shy of estimates, the earnings per share of $13.82 were above what was expected, as was the record $13.08 billion in net profits. Year-over-year, profit was relatively flat ($13.06 billion in 2012), while revenues were up significantly from the $46.33 billion posted in Q1 of 2012.

Carrying the day were record sales of iPhones and iPads — the latter of which sold 22.9 million units during the quarter, up from 15.4 million a year ago and 14 million last quarter. Other products, however, continued their slow descent towards potential obsolescence. Only 4.1 million Macs and 12.7 million iPods were shipped during the quarter, compared to 5.2 million and 15.4 million, respectively, the same time last year.

As usual, the vast majority of Apple’s revenue, $20.3 billion to be exact, comes from the US. But other markets are growing quickly. In particular, revenues from China are up 67 percent year-over-year to 6.8 billion, while Japan and Asia Pacific are up 88 and 89 percent, respectively, just from last quarter.

Through all this Apple has continued to build an enormous war chest, with $196 billion in assets at its disposal. So, should the allure of its brushed aluminum lineup fade, the company should be able to carry on for some time before falling on dire straits. If you’d like to dig in to all the financial details check out the PR after the break and tune in here for updates when the earnings call gets under way at 5PM ET.

Update: The call is done and all the important tidbits are after the break.

Updates:

5:04PM Tim Cook just let us know that “well over half a billion iOS devices” have been sold as of the end of the quarter. That’s a pretty decent jump from June’s 400 million number.

5:12PM Peter Oppenheimer gave China a special shout out, where he says iPhone sales have doubled.

5:14PM Oppenheimer laid some of the blame for slow Mac sales on delays getting the 13-inch Retina MacBook Pro and iMac to market in some regions.

5:17PM iCloud usage appears to have skyrocketed, with Oppenheimer claiming 250 million accounts now active.

5:20PM Apparently over 75 million iOS devices were sold in this quarter alone. Not too shabby.

5:24PM Tim Cook says that, despite competitors going big, he feels no need to follow their lead. When it comes to smartphone screen sizes, Apple has “picked the right one” he says.

5:34PM Tim Cook admits that, while the short ramp up time for shipping new iMacs may have hurt sales for the quarter, he’s sure there “has been some cannibalization” from the iPad.

5:46PM Apple TV, the perpetual Cupertino hobby, is apparently doing quite well, with 2 million units being sold in the quarter — a jump of 60 percent year-over-year according to Tim Cook.

5:54PM Tim Cook doesn’t see cannibalization as a problem necessarily, but as a “huge opportunity.” As he explained, if they held back on the iPad due to fear of cannibalizing Mac sales another company would simply come along, fill that niche and eat into Apple’s bottom line anyway.

6:02PM Cook just sneaked in a mention that 36 new carriers with LTE will be adding the iPhone 5 next week, including those in countries like Italy, Denmark, and Switzerland.

6:05PM That’s all folks, thanks for tuning in.

Show full PR text

Apple Reports Record Results
47.8 Million iPhones Sold; 22.9 Million iPads Sold

CUPERTINO, Calif., Jan 23, 2013 (BUSINESS WIRE) — Apple(R) today announced financial results for its 13-week fiscal 2013 first quarter ended December 29, 2012. The Company posted record quarterly revenue of $54.5 billion and record quarterly net profit of $13.1 billion, or $13.81 per diluted share. These results compare to revenue of $46.3 billion and net profit of $13.1 billion, or $13.87 per diluted share, in the 14-week year-ago quarter. Gross margin was 38.6 percent compared to 44.7 percent in the year-ago quarter. International sales accounted for 61 percent of the quarter’s revenue.

Average weekly revenue was $4.2 billion in the quarter compared to $3.3 billion in the year-ago quarter.

The Company sold a record 47.8 million iPhones in the quarter, compared to 37 million in the year-ago quarter. Apple also sold a record 22.9 million iPads during the quarter, compared to 15.4 million in the year-ago quarter. The Company sold 4.1 million Macs, compared to 5.2 million in the year-ago quarter. Apple sold 12.7 million iPods in the quarter, compared to 15.4 million in the year-ago quarter.

Apple’s Board of Directors has declared a cash dividend of $2.65 per share of the Company’s common stock. The dividend is payable on February 14, 2013, to shareholders of record as of the close of business on February 11, 2013.

“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.”

“We’re pleased to have generated over $23 billion in cash flow from operations during the quarter,” said Peter Oppenheimer, Apple’s CFO. “We established new all-time quarterly records for iPhone and iPad sales, significantly broadened our ecosystem, and generated Apple’s highest quarterly revenue ever.”

Apple is providing the following guidance for its fiscal 2013 second quarter:

* revenue between $41 billion and $43 billion

* gross margin between 37.5 percent and 38.5 percent

* operating expenses between $3.8 billion and $3.9 billion

* other income/(expense) of $350 million

* tax rate of 26%

Apple will provide live streaming of its Q1 2013 financial results conference call beginning at 2:00 p.m. PST on January 23, 2013 at www.apple.com/quicktime/qtv/earningsq113 . This webcast will also be available for replay for approximately two weeks thereafter.

This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), and tax rate. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 29, 2012, and its Form 10-Q for the quarter ended December 29, 2012 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

NOTE TO EDITORS: For additional information visit Apple’s PR website ( www.apple.com/pr ), or call Apple’s Media Helpline at (408) 974-2042.

(C) 2013 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS and Macintosh are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares which are reflected in
thousands and per share amounts)
Three Months Ended
————————————-
December 29, December 31,
2012 2011
—————- —————-
Net sales $ 54,512 $ 46,333
Cost of sales (1) 33,452 25,630
——– ——–
Gross margin 21,060 20,703
——– ——–
Operating expenses:
Research and development (1) 1,010 758
Selling, general and administrative (1) 2,840 2,605
——– ——–
Total operating expenses 3,850 3,363
——– ——–
Operating income 17,210 17,340
Other income/(expense), net 462 137
——– ——–
Income before provision for income taxes 17,672 17,477
Provision for income taxes 4,594 4,413
——– ——–
Net income $ 13,078 $ 13,064
======== ======== ======== ========
Earnings per share:
Basic $ 13.93 $ 14.03
Diluted $ 13.81 $ 13.87
Shares used in computing earnings per share:
Basic 938,916 931,041
Diluted 947,217 941,572
Cash dividends declared per common share $ 2.65 $ 0
(1) Includes share-based compensation expense as follows:
Cost of sales $ 85 $ 63
Research and development $ 224 $ 160
Selling, general and administrative $ 236 $ 197

Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares which are reflected in
thousands)
December 29, September 29,
2012 2012
—————— ——————
ASSETS:
Current assets:
Cash and cash equivalents $ 16,154 $ 10,746
Short-term marketable securities 23,666 18,383
Accounts receivable, less allowances of $119 and $98, respectively 11,598 10,930
Inventories 1,455 791
Deferred tax assets 2,895 2,583
Vendor non-trade receivables 9,936 7,762
Other current assets 6,644 6,458
——— ———
Total current assets 72,348 57,653
Long-term marketable securities 97,292 92,122
Property, plant and equipment, net 15,422 15,452
Goodwill 1,381 1,135
Acquired intangible assets, net 4,462 4,224
Other assets 5,183 5,478
——— ———
Total assets $ 196,088 $ 176,064
========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable $ 26,398 $ 21,175
Accrued expenses 13,207 11,414
Deferred revenue 7,274 5,953
——— ———
Total current liabilities 46,879 38,542
Deferred revenue – non-current 2,938 2,648
Other non-current liabilities 18,925 16,664
——— ———
Total liabilities 68,742 57,854
——— ———
Commitments and contingencies
Shareholders’ equity:
Common stock, no par value; 1,800,000 shares authorized; 938,973 and 17,167 16,422
939,208 shares issued and outstanding, respectively
Retained earnings 109,567 101,289
Accumulated other comprehensive income 612 499
——— ———
Total shareholders’ equity 127,346 118,210
——— ———
Total liabilities and shareholders’ equity $ 196,088 $ 176,064
========= ========= ========= =========

Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Three Months Ended
————————————-
December 29, December 31,
2012 2011
—————- —————-
Cash and cash equivalents, beginning of the period $ 10,746 $ 9,815
——– ——– ——– ——–
Operating activities:
Net income 13,078 13,064
Adjustments to reconcile net income to cash generated by operating
activities:
Depreciation and amortization 1,588 721
Share-based compensation expense 545 420
Deferred income tax expense 1,179 1,456
Changes in operating assets and liabilities:
Accounts receivable, net (668) (3,561)
Inventories (664) (460)
Vendor non-trade receivables (2,174) (1,206)
Other current and non-current assets 413 (962)
Accounts payable 6,145 4,314
Deferred revenue 1,611 1,296
Other current and non-current liabilities 2,373 2,472
——– ——–
Cash generated by operating activities 23,426 17,554
——– ——–
Investing activities:
Purchases of marketable securities (37,192) (40,175)
Proceeds from maturities of marketable securities 3,460 3,038
Proceeds from sales of marketable securities 23,002 21,472
Payments made in connection with business acquisitions, net (284) 0
Payments for acquisition of property, plant and equipment (2,317) (1,321)
Payments for acquisition of intangible assets (138) (108)
Other (52) (34)
——– ——–
Cash used in investing activities (13,521) (17,128)
——– ——–
Financing activities:
Proceeds from issuance of common stock 76 91
Excess tax benefits from equity awards 404 333
Dividends and dividend equivalent rights paid (2,493) 0
Repurchase of common stock (1,950) 0
Taxes paid related to net share settlement of equity awards (534) (355)
——– ——–
Cash (used in)/generated by financing activities (4,497) 69
——– ——–
Increase in cash and cash equivalents 5,408 495
——– ——–
Cash and cash equivalents, end of the period $ 16,154 $ 10,310
======== ======== ======== ========
Supplemental cash flow disclosure:
Cash paid for income taxes, net $ 1,890 $ 1,474

Apple Inc.
Q1 2013 Unaudited Summary Data
(Units in thousands, Revenue in millions)
Q1’13 (a) Q4’12 (a) Q1’12 (a) Sequential Change Year/Year Change
——————- ——————- ——————- —————— —————–
Operating Segments Revenue Revenue Revenue Revenue Revenue
———– ———– ———– ———- ———
Americas $ 20,341 $ 13,810 $ 17,714 47% 15%
Europe 12,464 8,023 11,256 55% 11%
Greater China (b) 6,830 5,427 4,080 26% 67%
Japan 4,443 2,367 3,550 88% 25%
Rest of Asia Pacific 3,993 2,110 3,617 89% 10%
Retail 6,441 4,229 6,116 52% 5%
—— —— —— ———- ———
Total Apple $ 54,512 $ 35,966 $ 46,333 52% 18%
— ——
Q1’13 (a) Q4’12 (a) Q1’12 (a) Sequential Change Year/Year Change
——————- ——————- ——————- —————— —————–
Product Summary Units Revenue Units Revenue Units Revenue Units Revenue Units Revenue
—— ———– —— ———– —— ———– —– ———- —– ———
iPhone (c) 47,789 $ 30,660 26,910 $ 16,645 37,044 $ 23,950 78% 84% 29% 28%
iPad (c) 22,860 10,674 14,036 7,133 15,434 8,769 63% 50% 48% 22%
Mac (c) 4,061 5,519 4,923 6,617 5,198 6,598 – 18% – 17% – 22% – 16%
iPod (c) 12,679 2,143 5,344 820 15,397 2,528 137% 161% – 18% – 15%
iTunes/Software/Services (d) 3,687 3,496 3,020 5% 22%
Accessories (e) 1,829 1,255 1,468 46% 25%
—— —— —— ———- ———
Total Apple $ 54,512 $ 35,966 $ 46,333 52% 18%
— ——

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Netflix Q4 earnings show 2 million new customers streaming in the US, 6 million total internationally

Netflix Q4 earnings show XX subscribers worldwide

In 2012 Netflix expanded streaming to a few new countries and attempted to undo the damage incurred by its failed Qwikster spinoff in 2011, and now it’s final results for the year are in. Its streaming subscriber count is now 27 million in the US alone, with 6 million outside the country for a global count topping 33 million. Most notably, despite the expansion it still managed a profit of $8 million on $945 million in revenue. There’s also a slew of original content on the way headed by Arrested Development and House of Cards, and its OpenConnect ISP program has now gotten a boost from high bitrate 1080p video and even 3D. Now that the Video Protection Privacy Act has been amended, Netflix also mentioned Facebook integration will be enabled in the coming months for US customers. If you’re worried about it spamming your feed you may be able to relax however, since by default it will not auto post viewing activity, instead opting to let members “post specific titles they’re passionate about.”

So what about the competition from Amazon, Redbox Instant and Hulu? According to Netflix’s stats based on its 200 most popular movies and TV shows, none of the other streaming services offer more than 73 of them (check out a graphic after the break.) Regarding that original content, Netflix is already referring to the February 1st worldwide, full-season debut of Cards as a “defining moment in the development of internet TV.” We’ll keep digging through the numbers and tune into the investor call at 6PM for more information, until then hit the source link to check out the data for yourself.

Netflix Q4 earnings show 2 million new customers streaming in the US, 6 million total internationally

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Source: Netflix (PDF)

Google announces Q4 2012 earnings: impressive revenues of $14.42 billion, excluding Motorola Home

Google announces Q4 2012 earnings impressive revenues of $1442 billion, excluding Motorola Home

Earnings season is swinging into high gear and today’s big player is Google. The internet giant just announced its earnings for the fourth quarter of 2012, and unsurprisingly it’s still raking in the dough. For the three month period ending December 31st, 2012 the company pulled in $14.42 billion in revenue — a staggering 36 percent increase year-over-year. That doesn’t even include revenue generated by Motorola’s recently spun off Home division, which would have pushed the total to $15.24 billion. 2012 also marked the first year that the company broke the $50 billion barrier for total revenues. Of course, bringing in all that money means nothing if you can’t actually turn a profit. Good news for investors is that Google saw a net income of $2.89 billion this quarter, up from $2.71 billion the same time last year and $2.74 billion last quarter. Not surprisingly, a large chunk of that cash is coming from Google’s own properties and advertising — with Google-owned sites accounting for 67 percent of revenues and ads pulling in $12 billion on their own.

Obviously, a vast majority of Big G’s income is coming from the US, $5.99 billion in this quarter, but international markets are still hugely important for the company. 53 percent of its revenues came from overseas ventures, including $1.3 billion from the UK alone.

Motorola Mobility, on the other hand, isn’t faring so well. While pulling in $1.51 billion in revenue, the phone manufacturer lost $353 million as its new parent company continues to try to turn around the business. Whether or not Mountain View is succeeding is debatable as revenues continue to drop and losses increase for the beleaguered, former icon. There is a sizable war chest at its disposal however, as Google claims to have $48.1 billion in cash or its equivalent on hand. For more financial fun check out the PR after the break and check back here for updates from the earnings call this afternoon.

Update: Larry Page briefly touched on the ongoing drama over Nexus 4 stock saying, “clearly there’s work to be done managing our supply better, and that is a priority to our teams.” Though, we’re not sure how much control Page actually has over that.

Nikesh Arora, Google’s Senior Vice President and Chief Business Officer, took a pretty big chunk of time to talk about the spread of YouTube and the earning power of ads. In case you continue to doubt that the streaming service is a viable money-making platform, Arora said he estimates Gangnam Style has raked in $8 million through ads. Who said making an ass of yourself isn’t a viable career choice?

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Google Inc. Announces Fourth Quarter and Fiscal Year 2012 Results

Google Inc. reported consolidated revenues of $14.42 billion for the quarter ended December 31, 2012. Consolidated revenues would have been $15.24 billion had Motorola Home been included.

MOUNTAIN VIEW, Calif. – January 22, 2013 – Google Inc. (NASDAQ: GOOG) today announced financial results for the quarter and the fiscal year ended December 31, 2012.

“We ended 2012 with a strong quarter,” said Larry Page, CEO of Google. “Revenues were up 36% year-on-year, and 8% quarter-on-quarter. And we hit $50 billion in revenues for the first time last year – not a bad achievement in just a decade and a half. In today’s multi-screen world we face tremendous opportunities as a technology company focused on user benefit. It’s an incredibly exciting time to be at Google.”

Q4 Financial Summary

In December 2012, we entered into an agreement with Arris Group, Inc. and certain other persons to dispose the Motorola Home business for a total consideration of approximately $2.35 billion in cash and stock, subject to certain adjustments. The transaction is expected to close in 2013. As a result, financial results related to the Home business are presented as net loss from discontinued operations on the consolidated statements of income, and are excluded from all other results unless otherwise noted. Assets and liabilities of the Home business are not presented separately because they are not material.

Google Inc. reported consolidated revenues of $14.42 billion for the quarter ended December 31, 2012, an increase of 36% compared to the fourth quarter of 2011. Google Inc. reports advertising revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the fourth quarter of 2012, TAC totaled $3.08 billion, or 25% of advertising revenues.

Operating income, operating margin, net income, and earnings per share (EPS) are reported on a GAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAP measures at the end of this release.

GAAP operating income in the fourth quarter of 2012 was $3.39 billion, or 24% of revenues. This compares to GAAP operating income of $3.51 billion, or 33% of revenues, in the fourth quarter of 2011. Non-GAAP operating income in the fourth quarter of 2012 was $4.27 billion, or 30% of revenues. This compares to non-GAAP operating income of $4.04 billion, or 38% of revenues, in the fourth quarter of 2011. Had we included Home, non-GAAP operating income in the fourth quarter of 2012 would have been $4.31 billion.
GAAP net income including net loss from discontinued operations in the fourth quarter of 2012 was $2.89 billion, compared to $2.71 billion in the fourth quarter of 2011. Non-GAAP net income in the fourth quarter of 2012 was $3.57 billion, compared to $3.13 billion in the fourth quarter of 2011.
GAAP EPS including impact from net loss from discontinued operations in the fourth quarter of 2012 was $8.62 on 335 million diluted shares outstanding, compared to $8.22 in the fourth quarter of 2011 on 329 million diluted shares outstanding. Non-GAAP EPS in the fourth quarter of 2012 was $10.65, compared to $9.50 in the fourth quarter of 2011.
Non-GAAP operating income and non-GAAP operating margin exclude stock-based compensation (SBC) expense, as well as restructuring and related charges recorded in our Motorola Mobile business. Non-GAAP net income and non-GAAP EPS exclude the expenses noted above, net of the related tax benefits, as well as net loss from discontinued operations. In the fourth quarter of 2012, the expense related to SBC and the related tax benefits were $700 million and $152 million compared to $536 million and $114 million in the fourth quarter of 2011. In the fourth quarter of 2012, restructuring and related charges recorded in our Motorola Mobile business were $178 million, and the related tax benefits were $65 million. In addition, net loss from discontinued operations, in the fourth quarter of 2012, was $21 million. In the fourth quarter of 2012, non-GAAP operating income with Home included the impact from Home of $35 million and excludes the above SBC expense and restructuring and related charges.
Q4 Financial Highlights

Revenues and other information – On a consolidated basis, Google Inc. revenues for the quarter ended December 31, 2012 was $14.42 billion, an increase of 36% compared to the fourth quarter of 2011.

Google Revenues (advertising and other) – Google revenues were $12.91 billion, or 89% of consolidated revenues, in the fourth quarter of 2012, representing a 22% increase over fourth quarter 2011 revenues of $10.58 billion.
Google Sites Revenues – Google-owned sites generated revenues of $8.64 billion, or 67% of total Google revenues, in the fourth quarter of 2012. This represents a 18% increase over fourth quarter 2011 Google sites revenues of $7.29 billion.

Google Network Revenues – Google’s partner sites generated revenues of $3.44 billion, or 27% of total Google revenues, in the fourth quarter of 2012. This represents a 19% increase from fourth quarter 2011 Google network revenues of $2.88 billion.

Other Revenues – Other revenues from Google were $829 million, or 6% of total Google revenues, in the fourth quarter of 2012. This represents a 102% increase over fourth quarter 2011 other revenues of $410 million.

Google International Revenues – Google revenues from outside of the United States totaled $6.9 billion, representing 54% of total Google revenues in the fourth quarter of 2012, compared to 53% in the third quarter of 2012 and 53% in the fourth quarter of 2011.

Foreign Exchange Impact on Google Revenues – Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the third quarter of 2012 through the fourth quarter of 2012, our Google revenues in the fourth quarter of 2012 would have been $130 million lower. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the fourth quarter of 2011 through the fourth quarter of 2012, our Google revenues in the fourth quarter of 2012 would have been $193 million higher.

Google revenues from the United Kingdom totaled $1.30 billion, representing 10% of Google revenues in the fourth quarter of 2012, compared to 10% in the fourth quarter of 2011.

In the fourth quarter of 2012, we recognized a benefit of $37 million to Google revenues through our foreign exchange risk management program, compared to $25 million in the fourth quarter of 2011.

Reconciliations of our non-GAAP international revenues excluding the impact of foreign exchange and hedging to GAAP international revenues are included at the end of this release.

Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 24% over the fourth quarter of 2011 and increased approximately 9% over the third quarter of 2012.

Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 6% over the fourth quarter of 2011 and increased approximately 2% over the third quarter of 2012.

TAC – Traffic acquisition costs, the portion of revenues shared with Google’s partners, increased to $3.08 billion in the fourth quarter of 2012, compared to $2.45 billion in the fourth quarter of 2011. TAC as a percentage of advertising revenues was 25% in the fourth quarter of 2012, compared to 24% in the fourth quarter of 2011.

The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.44 billion in the fourth quarter of 2012. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $634 million in the fourth quarter of 2012.

Motorola Mobile Revenues (hardware and other) – Motorola Mobile revenues were $1.51 billion, or 11% of consolidated revenues in the fourth quarter of 2012.

Other Cost of Revenues – Other cost of revenues, which is comprised primarily of data center operational expenses, amortization of intangible assets, content acquisition costs, credit card processing charges, and manufacturing and inventory-related costs, increased to $3.14 billion, or 22% of revenues, in the fourth quarter of 2012, compared to $1.25 billion, or 12% of revenues, in the fourth quarter of 2011.

Operating Expenses – Operating expenses, other than cost of revenues, were $4.81 billion in the fourth quarter of 2012, or 33% of revenues, compared to $3.38 billion in the fourth quarter of 2011, or 32% of revenues.

Amortization Expenses – Amortization expenses of acquisition-related intangible assets were $289 million for the fourth quarter of 2012. Of the $289 million, $153 million was as a result of the acquisition of Motorola, of which $116 million was allocated to Google and $37 million was allocated to Motorola Mobile.

Stock-Based Compensation (SBC) – In the fourth quarter of 2012, the total charge related to SBC was $708 million, compared to $536 million in the fourth quarter of 2011.

We currently estimate SBC charges for grants to employees prior to January 1, 2013 to be approximately $2.5 billion for 2013. This estimate does not include expenses to be recognized related to employee stock awards that are granted after December 31, 2012 or non-employee stock awards that have been or may be granted.

Operating Income – On a consolidated basis, GAAP operating income in the fourth quarter of 2012 was $3.39 billion, or 24% of revenues. This compares to GAAP operating income of $3.51 billion, or 33% of revenues, in the fourth quarter of 2011. Non-GAAP operating income in the fourth quarter of 2012 was $4.27 billion, or 30% of revenues. This compares to non-GAAP operating income of $4.04 billion, or 38% of revenues, in the fourth quarter of 2011.

Google Operating Income – GAAP operating income for Google was $3.75 billion, or 29% of Google revenues, in the fourth quarter of 2012. This compares to GAAP operating income of $3.51 billion, or 33% of Google revenues, in the fourth quarter of 2011. Non-GAAP operating income in the fourth quarter of 2012 was $4.42 billion, or 34% of Google revenues. This compares to non-GAAP operating income of $4.04 billion in the fourth quarter of 2011, or 38% of Google revenues.

Motorola Mobile Operating Loss – GAAP operating loss for Motorola Mobile was $353 million, or -23% of Motorola Mobile revenues in the fourth quarter of 2012. Non-GAAP operating loss for Motorola Mobile in the fourth quarter of 2012 was $152 million, or -10% of Motorola Mobile revenues.

Interest and Other Income, Net – Interest and other income, net, was $152 million in the fourth quarter of 2012, compared to an expense of $18 million in the fourth quarter of 2011.

Income Taxes – Our effective tax rate was 18% for the fourth quarter of 2012.

Net Income – GAAP net income in the fourth quarter of 2012 was $2.89 billion, compared to $2.71 billion in the fourth quarter of 2011. Non-GAAP net income was $3.57 billion in the fourth quarter of 2012, compared to $3.13 billion in the fourth quarter of 2011. GAAP EPS in the fourth quarter of 2012 was $8.62 on 335 million diluted shares outstanding, compared to $8.22 in the fourth quarter of 2011 on 329 million diluted shares outstanding. Non-GAAP EPS in the fourth quarter of 2012 was $10.65, compared to $9.50 in the fourth quarter of 2011.

Cash Flow and Capital Expenditures (including Home) – Net cash provided by operating activities in the fourth quarter of 2012 totaled $4.67 billion, compared to $3.92 billion in the fourth quarter of 2011. In the fourth quarter of 2012, capital expenditures were $1.02 billion, the majority of which was for production equipment, data center construction and facilities-related purchases. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the fourth quarter of 2012, free cash flow was $3.65 billion.

We expect to continue to make significant capital expenditures.

A reconciliation of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, is included at the end of this release.

Cash – As of December 31, 2012, cash, cash equivalents, and marketable securities were $48.1 billion.

Headcount – On a worldwide basis, we employed 53,861 full-time employees (37,544 in Google and 11,113 in Motorola Mobile and 5,204 in Motorola Home) as of December 31, 2012, compared to 53,546 full-time employees as of September 30, 2012.

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