CEO delves into details to add color to Apple earnings announcements
Beyond the "big story" about Apple's analyst-beating earnings, profits and surprise stock split, financial analysts got a chance to ask some probing questions during Wednesday's Apple conference call discussing the company's fiscal Q2 results. In a Q&A session accompanying the announcements, Apple CFO Lucas Maestri and CEO Tim Cook revealed some details and their thoughts on diverse areas of the business, ranging from specifics on China to the changing US smartphone landscape.
Apple products still finding new audiences even as leading lines mature
With the exception of iPads and the declining iPod, the numbers coming out of Apple's conference call with analysts mirror the title of Pixar's best movie: Up. Of primary importance to analysts were the better-than-expected iPhone sales, but Mac sales were also up from the year-ago quarter. Other numbers revealed in the course of the call were also positive; growth in China and Japan, strength in developing markets and new revelations on Apple TV and iTunes numbers.
Facebook users' shift to mobile accelerating, new CFO inbound
Facebook today reported financial results for the quarter. The company posted $2.5 billion in revenue beating analyst expectations, with an operating margin of 43 percent. Net income hit $642 million, with earnings per share of $0.25, an over 70 percent gain in profit in a year. Notably, mobile daily active users increased to 609 million, an increase of 43 percent from 2013.
Blames channel inventory imbalance for most of year-over-year decline
On paper, the sales of the iPad in Apple's fiscal second quarter look bad: a 16 percent drop from the year-ago quarter, rumors of which already had pundits and business sites wondering if the iPad had peaked. Statistics, however, can sometimes be misleading -- and in an unusually proactive explanation, Apple CEO Tim Cook took time at the start of his conference call with analysts to explain that changes in channel inventory accounted for most of the "lower" sales.
New rules allow for paid faster access, prohibits blocking
The Federal Communications Commission (FCC) will circulate new "open" Internet regulations internally on Thursday. The new proposal will allow companies to pay Internet providers a fee for "special access" to customers and boosted speed of delivery of the paid content, on a "commercially reasonable" basis, paving the way for more deals like the one Comcast struck with Netflix. The FCC will determine what the terms will be on a case-by-case basis.
Dividends also to go up on an annual basis in moves to increase stock value
In a surprise announcement, Apple will do a 7:1 stock split on June 6, giving stockholders of record as of June 2 an additional six shares for every one share of stock they currently hold. Trading will resume on June 9 at the split-adjusted price, which CEO Tim Cook has said the company wants to be more affordable so that smaller investors can get into the stock. Given today's closing price of $524.75, the average price of a share would drop to $75 if the split were happening now.
Retail revenues virtually flat
As a part of announcing its second-quarter results, Apple has also posted a detailed breakdown (PDF), exposing further facts. They reveal, for instance, that Apple's iPad revenues dropped 16.4 percent year-over-year, shifting from roughly $8.7 billion to $7.6 billion. The company has typically seen continuous growth for the iPad, but units fell from just under 19.5 million to 16.3 million. Cook later clarified that inventory changes made the drop seem much more dramatic than it actually was in terms of end-user sales.
Records 43.7 million iPhones, 16.3 million iPads
Apple has posted $45.6 billion in revenues in its second fiscal quarter, up from $43.6 billion the same period a year ago. Net profits rose from $9.5 billion to $10.2 billion, or from $10.09 per share to $11.62. The company sold 43.7 million iPhones, an increase from the 37.4 million in Q2 2013. iPad sales came in at 16.3 million units, below a Wall Street consensus forecast of 19.7 million. The company also recorded 4.1 million Macs.
Chernin dumps $500 million into partnership's unknown project
AT&T is partnering with The Chernin Group, with the latter pouring $500 million into an effort to distribute Internet-based video services. What exactly AT&T and Chernin will produce as a result isn't clear, but premium services like Netflix are suspected. The terms of the deal have not yet been announced.
Apple stores adding green to 'leaf' in Apple logo for Earth Day
Continuing with the various environmentally-themed disclosures on Monday, Apple has begun decorating its Apple Stores for Earth Day on Tuesday by adding green gels to the "leaf" portion of the Apple logo on some stores. The changeover is happening worldwide, with pictures of the modified logo appearing from China and Australia that also include employees in green-colored work shirts.
New users will need to pay more, existing Netflix subscribers keep current rates
Netflix is planning to raise the price of its service to new members in the near future, among other changes, the company has revealed as part of its quarterly financial results. Following a limited increase in Ireland, the streaming video service is now looking to increase the subscription fee by one to two dollars, depending on the country.
Company facing headwind from phablets, improved Android tablets
Almost half of a group of 34 analysts tracked by Fortune are expecting Apple to report a slight decline in iPad sales year-over-year during its Q2 2014 results, due to be announced April 23rd. The overall consensus currently sits at 19.3 million units, which would be a 0.7 percent dip. Polling among the professional analysts in the group is somewhat more positive, calling for a 19.4 million consensus versus the amateurs' 19.2 million.
Expected new products and updates, larger screen sizes will boost AAPL
Historically, investment and Wall Street analysts have had a poor track record predicting Apple's fortunes ahead of time. However, as Apple's guidance has gotten more accurate, and as supplier leaks and blatant manipulation of the market grow, predictions are getting more accurate. As it traditionally does, Fortune magazine has rounded up the predictions of various investment houses and independent analysts, which show slow growth in iPhones this quarter, but expectations of boosts ahead.
$200 million payment to Global Foundries blocked quarterly profit
Beating analysts projections, AMD today announced revenue for the first quarter of 2014 of $1.40 billion, operating income of $49 million and net loss of $20 million, or $0.03 per share. Had the company not made its last $200 million cash payment to Global Foundries, it would have greatly exceeded its projections for the quarter. For the second quarter of 2014, the graphics and chip maker expects revenue to increase three percent, plus or minus three percent, sequentially.
Smaller carriers favored in auction -- 30MHz reserved
Federal Communications Commission Chairman Tom Wheeler has confirmed that he plans to limit how much spectrum AT&T and Verizon can buy in the 2015 auction of bandwidth reclaimed from TV broadcasters. The chairman spoke out a day after AT&T threatened to boycott the auction, possibly slashing the reimbursement that the government would get from the auction.
Charming, surprising, intriguing finds now available or coming to market soon
Continuing our look at some of the more interesting devices and services we ran across at Macworld in San Francisco last month, MacNN and Electronista staffers will periodically write about items and vendors that caught our eye at the show that we thought our readers would like to know about. Today's focus is on two successfully-funded Kickstarter campaigns: The Roost stand for notebooks, and the iMacompanion USB port from Wiplabs.
Cost per click dropping, growth rate slowing for dominant search engine
Google today announced financial results for the quarter that ended in March. The search engine giant reported consolidated revenues of $15.42 billion for the quarter, an increase of 19 percent compared to the first quarter of 2013. Operating income in the first quarter of 2014 was $4.12 billion, or 27 percent of revenues. Earnings per share in the first quarter was $5.04 on 685 million diluted shares outstanding, compared to $4.97 in the first quarter of 2013 on 673 million diluted shares outstanding.
Concern about rebuilding surface, users likely to get near nothing
Bankrupt bitcoin exchange Mt. Gox has apparently abandoned its goal of rebuilding itself, and now is asking a Japanese court to allow complete liquidation. Should the Japanese court approve of the move, it will appoint a trustee which will assume control of all Mt. Gox assets from CEO Mark Karpeles. Additionally, US courts overseeing the Chapter 15 bankruptcy have been informed that regardless of judicial decree, Karpeles will not appear in court to answer questions as ordered by bankruptcy Judge Stacey Jernigan.
Judge ignores Apple argument that states have suffered no harm
For observers in Apple's battle against the US Department of Justice over alleged e-book "price fixing," it will come as no shock whatsoever that Judge Denise Cote has ruled against the company on a connected legal matter -- but the fact that she actually cited a reasoning based in law this time may surprise some. The US District Court judge has refuted Apple's filing for a dismissal in the lawsuits brought by 33 states and territories based on the DOJ case ruling.
Earnings mark 26 percent drop from fourth quarter
Intel Corporation today reported first-quarter revenue of $12.8 billion, operating income of $2.5 billion, net income of $1.9 billion and earnings per share of 38 cents. This is a dramatic drop from the company's fourth quarter results, with a drop of 26 percent in net income, with a drop of eight percent of the company's revenue.
Results see increased migration to mobile, decreasing price per ad
Yahoo has released its first quarter earnings report, with mixed successes. The company posted revenue of $1.13 billion for the first quarter of 2014, a one percent decrease from the first quarter of 2013. Net earnings for the first quarter of 2014 was $312 million, a 20 percent decrease compared to $390 million in the first quarter of 2013. However, search revenue climbed to $445 million from $425 million in the year-ago quarter. Paid clicks increased six percent, with an eight percent increase in price per click.
Long time employee pinned for job, given spot on board of directors
The Mozilla foundation has selected a new interim CEO and appointee to the Mozilla corporation Board of Directors. Long-time Mozilla employee Chris Beard has been chosen for the position while a search for a permanent appointee is undertaken. Executive Chairwoman Mitchell Baker says Beard has a "vision and sense of Mozilla equal to anyone's."
Company relies on conflation of sales with shipments to fool Wall Street, customers
A confidential report from Samsung dug up by Apple lawyers has -- for the second time in as many trials -- revealed that the Galaxy phone maker routinely misleads both investors and the public on its actual sales to end users, at least in the US market. The discrepancy can sometimes be large, and in Samsung's case it used those misleading figures to chip away at the iPad's "marketshare" when in fact it had not made even a modest dent.
Bid possible due to decline in Comcast stock price since merger announcement
Just a few short days after Comcast's hearing on Capital Hill, Charter Communications is said to be evaluating the notion of starting a bidding war for Time Warner Cable against Comcast. Potentially at stake are the subscribers that Comcast has promised to divest should the merger take place -- worth hundreds of millions of dollars annually.
Charming, surprising, intriguing finds coming to market soon
Now that we've had time to recover from the fury of meeting so many vendors at this year's Macworld, MacNN and Electronista have had a little time to reflect on some of the products and services we saw there. Many have yet to come to market -- a running joke was the number of projects crowdfunded last summer that will be arriving in stores soon -- some have won awards, and some are just little gems we were delighted, intrigued and wowed by. First up in this ongoing series is a successful Kickstarter startup, Glowdeck.
Executive selected for the job, will assist in Lenovo transition
Just prior to its offload to Lenovo, Motorola Mobility has named Rick Osterloh as chief operating officer. Jonathan Rosenberg, Google's Senior Vice President of Product Management announced the appointment of Osterloh, who is replacing Dennis Woodside -- who departed to become Dropbox's first chief operating officer.
Approval from Chinese Ministry of Commerce brings purchase closer to completion
The acquisition of Nokia's Devices and Services arm by Microsoft has been given the green light by Chinese authorities, both companies have revealed. The approval by the Chinese Ministry of Commerce (MOFCOM) brings the $7.2 billion purchase one step closer to completion, and brings the total number of markets approving the deal to 16.
Stronger March sales could help offset weak quarter overall
Analyst Brian White of Cantor Fitzgerald, who is currently on a tour of Asia and meeting with partners in Apple's supply chain and resellers, has told investors in a memo on Monday that his sources indicate that Apple sales strengthened substantially in March, following a "soft" January and February. While still believing that sales will be down 24 percent from the holiday quarter (compared to an average drop of 19 percent), White said Apple may still "surprise" analysts -- who have been expecting revenue to be generally flat -- in its next earnings report.
Low quarterly revenues could bounce back for HTC in next quarter
HTC is continuing its trend of poor financial results, with a loss in the first quarter that was lower than expected by analysts. The latest financial release shows quarterly revenues of NT$33.12 billion ($1.09 billion), giving the smartphone producer a net loss of NT$1.88 billion ($62.06 million) and an operating loss of NT$2.05 billion ($67.75 million).
Facebook's Mark Zuckerberg tops high-tech
Apple CEO Tim Cook pulled in $73.9 million in compensation during 2013, according to data compiled by USA Today. That included a $4.3 million salary, and $69.6 million in vested stock options Cook had been awarded several years ago. The figures were enough to rank Cook second among a list of best-paid Silicon Valley executives, but this year's payout was atypical for the Apple CEO.
Analyst notes mystery $250M payment to buyer of Apple RAM supplier Elpida
Independent analyst Matt Margolis has reported on a mysterious $250 million payment to memory maker Micron, which in turn last summer bought out another memory manufacturing firm, Elpida, for $2 billion. Among Elpida's many customers, one in particular has a habit of being both secretive and willing to pay large sums in advance to procure supply -- Apple. If the payment is from the iPhone maker, it may be trying to lock in supplies of Micron's new LPDDR4 DRAM.
Company likely to announce adjusted policies during next earnings call
Tech analyst Gene Munster of Piper Jaffray has told investors in a new memo that he expects "moderate" increases in both Apple's share-buyback program and its dividend to shareholders, likely to be announced during the company's next earnings call, scheduled for April 23. This belief, he noted, is already "priced into" shares of AAPL and is unlikely to take price any higher in and of itself. The current quarterly dividend, raised last year, is $3.05 per common share.
India court alleges CEO personally responsible for supplier debt
An arrest warrant has been issued against Samsung Electronics CEO Lee Kun-hee in India. The executive must appear before a court in Ghaziabad within six weeks' time to answer charges alleged from a supplier. The executive has surrendered before the court, to answer the charges of willfully not paying the promissory note worth more than $1.4 million dollars for more than a decade.
Acquisition could lead to YouTube competitor from Yahoo
Yahoo could be looking to acquire video service News Distribution Network for $300 million, according to a report. The acquisition, which is said to be in preliminary talks at the moment, could lead to Yahoo CEO Marissa Mayer taking on her previous employer by creating its own video sharing service similar to the currently-dominant YouTube.
Suit alleges shareholders were mislead about company future intentions
HP has agreed to dole out $57 million in response to a legal challenge, accusing the company's previous executives of defrauding shareholders. The claim arose when HP changed corporate direction towards services and away from hardware, and ditched the WebOS platform with abandonment of the TouchPad tablet after less than two months availability.
Company may beat consensus with above-average iPhone growth
Apple has announced that it will release its Q2 results and hold its quarterly conference call with analysts on April 23 after the markets close. The company's fiscal second quarter, which just ended, is traditionally a difficult one for the company -- at least from an analyst's perspective. Sales, while still growing year-over-year and extremely robust by the standards of nearly any other company, fall precipitously from the previous holiday quarter. Apple's Q1 saw $57.6 billion in revenue, but the company guided analysts that it expects between $42 billion and $44 billion for this quarter.
Zuckerberg reveals high user counts of social network in Oculus VR conference call
Facebook has 1 billion monthly active users, an increase from 945 million in December, the company has revealed. Part of a conference call discussing yesterday's announcement of Facebook's Oculus VR acquisition, CEO Mark Zuckerberg revealed the figures for both the social network and Instagram, which has hit 200 million monthly active accounts after reaching 150 million in September last year.
Capital investment intended to compete against Amazon, Microsoft
Networking company Cisco is commencing an initiative to enter the cloud computing industry. The giant has announced plans to launch Cisco Cloud Services, a program similar to Amazon's distributed offering, with a capital expenditure of $1 billion over the next two years.
Transfer of Nokia mobile phone business to Microsoft delayed by Asian regulators
The acquisition of Nokia's mobile phone business by Microsoft will take longer than previously thought, with both companies expecting to complete the $7.2 billion sale in April. While the deal has received regulatory approval in the United States and Europe, pending approvals from "certain antitrust authorities in Asia" are causing the delay in closing the purchase.
Total of 330 technical consultants will lose jobs at Sprint
Sprint is closing a number of its stores and repair centers, in an effort to reduce its expenditure. Part of cuts revealed by Sprint in January, the SoftBank-owned carrier laid off a total of 330 technical consultants, shutting down 150 service and repair centers in the process, as well as closing 55 stores deemed to be performing under expectations.
Mike Lynch pens letter, demanding HP reveal internal documents
Former chief of HP acquisition Autonomy, Mike Lynch, has fired off a missive accusing HP of misleading shareholders about his former company's accounting problems. In his letter, the executive claims that the company was smeared by HP in the days leading to HP's $8.8 billion write-down in 2012, and asked the shareholders to "help put things right."
Multi-state group to look at effect on broadband industry
Comcast and Time Warner Cable are facing more than just federal inspection of the merger between the pair. Reports are surfacing that Florida, Indiana, and other as-yet-unnamed states are looking at the transaction, in conjunction with the federal government effort by the US Department of Justice.
Supply chain data only suggests 38 million
March-quarter iPhone sales should come in stronger than has otherwise been forecast, says Morgan Stanley analyst Katy Huberty. Using the financial firm's "Alphawise Smartphone Tracker," Huberty suggests that Apple will record 42 million iPhones, up from the 37.4 million the company sold in the same quarter last year. Alphawise is based off web search analysis, but has proven reasonably accurate in the past, for instance suggesting 50.5 million phones in the December quarter. Actual sales were about 51 million.
Google a distant second in brand value, separate of market cap
In a report released on Tuesday, Brand Finance compiled a list of 500 US "billion-dollar brands" and found Apple to be at the top of the pyramid, with a brand name worth an estimated $104.6 billion -- far ahead of any rivals. The value of the brand name, which is a separate valuation from things like "market cap" or total asset value, is estimated by calculating the royalty rate one would need to license the brand, along with expected future revenue.
Unusual trade volume before CEO departure cited
Taiwanese officials are searching the Acer headquarters as well as homes of some employees in an ongoing insider trading investigation. Ten people, some of whom are Acer employees, were arrested in the probe, and are being questioned by the New Taipei District Prosecutor's Office in conjunction with the investigation, suspected of violating the Securities and Exchange Act of the country.
Exits Microsoft Xbox unit after 14 years, three console launches
Marc Whitten, the long-time chief product officer for Xbox at Microsoft, is leaving the company, the software giant has revealed. Whitten is departing to take on the same role of chief product officer at home audio device manufacturer Sonos, leaving Microsoft executive vice president Terry Myerson to temporarily take over the Xbox position while the company searches for a replacement.
Report notes six percentage point drop on cable company market share
According to data collated by the Leichtman Research Group, Comcast and Time Warner Cable are suffering under the weight of the economy and the "cord-cutting" movement. In 2013, Comcast lost 305,000 subscribers, with Time Warner Cable shedding 825,000. Combined, the pair will have 33.1 million customers, approximately two-thirds of the US cable company market.
Study notes US education sales now up over $1B per quarter
Analyst Charlie Wolf of Needham and Company has focused on Apple's success in the education market in his latest note to investors. Pointing out that the company recently achieved EDU segment sales of over $1 billion per quarter, Wolf notes that Mac sales have held steady over the past seven years, including post-2010 when the iPad was introduced and became an extremely popular educational tool, eating into sales of other PCs.
Majority of Google services remain unaffected
Users have discovered outages in some Google services. At noon ET, Google+ Hangouts, Google Sheets, and Google Talk were all inaccessible by most users worldwide. Google has since restored access to all three, with restoration times around 3PM EST for each with no other comment or discussions on the matter. The outage did not appear to affect Google's search engine or other services.
First attempt in 2006 failed due to unfavorable market conditions
According to sources familiar with the matter, domain name registrar GoDaddy is preparing for an initial public offering. Reportedly, the company is interviewing banks, who ultimately would lead to the underwriting of the IPO with a goal of trading commencing in the second half of 2014. Adding weight to remarks from the CEO from 2013 saying that an IPO was possible in 2014, GoDaddy seems to be primed to have a growth in profits. According to reports at the turn of the new year, GoDaddy's revenues are expected to climb nearly 10 percent in 2014.