Displaying items by tag: Q4

US operator suffers drop in its revenue as it prepares for 5G

Written on Tuesday, 05 February 2019 08:13

US telecommunications operator Sprint has posted a disappointing performance in its financial returns for Q4 in 2018.

Published in Telecom Operators

China’s Lenovo Group announced results on Thursday May 25, for its fourth fiscal quarter and full-year ended March 31, 2017. It was a year of significant transformation for Lenovo which made good progress in implementing and executing its new “three-wave strategy,” designed to meet the critical business challenges of today, while positioning the company for continued long-term profitable growth.

As part of Lenovo’s transformation, the company put in place an aggressive new end-to-end ownership model to manage each business differently, led by strong new leaders, and is seeing improvements as a result. 

“Despite challenging market conditions, Lenovo saw revenue resume to growth in the fourth quarter, after five quarters of decline,” said Yang Yuanqing, Lenovo Chairman and CEO. “To drive further growth, we have clearly defined the three-wave strategy. We will maintain PC leadership in scale, profitability and innovation in the first wave, while building our second wave, mobile and data center businesses into growth engines. Simultaneously, we will execute our third wave of “Device + Cloud” and “Infrastructure + Cloud” to capture the opportunities brought by new technologies. With this new strategy, we are confident to achieve long term, sustainable growth.”

For the fourth fiscal quarter, Lenovo’s revenue was US$9.6 billion, an increase of 4.9 percent year-over-year, fueled in part by a good performance in the PC/smart devices and mobile businesses. For the full-year ended March 31, 2017, Lenovo’s revenue was US$43 billion, down 4.2 percent year-over-year.

The company’s gross profit for the fourth fiscal quarter decreased 9.8 percent year-over-year to US$ 1.4 billion, while for the full year, gross profit fell 7.8 percent to US$6.1 billion. Operating profit for the fourth fiscal quarter was US$74 million. For the full year, Lenovo’s operating profit was US$672 million. Fourth-quarter net income was US$107 million, while net income for the full year was US$535 million, an increase of US$660 million year-over-year.

Basic earnings per share in the fourth fiscal quarter was 0.97 US cents or 7.56 HK cents, and for the full year basic earnings per share was 4.86 US cents or 37.71 HK cents. Lenovo’s Board of Directors declared a dividend of 2.63 US cents, or 20.5 HK cents per share for the fiscal year ended March 31, 2017.

For Lenovo’s PC and Smart Devices (PCSD) business group, which includes PCs, tablets and smart devices, its quarterly sales were up 4.9 percent year-over-year to US$6.7 billion. Quarterly shipments grew one percent to 14.4 million, four points better than the overall market. Pre-tax income for the quarter was US$288 million, a decrease of 4.7 percent year-over-year.

For the full year ended March 31, 2017, Lenovo’s PCSD sales were down 2.3 percent, but beating the overall market, at US$30 billion. Shipments for the year beat the market significantly by 7.1 points, with 66.6 million, while pre-tax income margin stood at five percent, a slight increase year-over-year.

Importantly, Lenovo continued to deliver strong results in both the fourth quarter and full year in the hyper-growth categories in this business, such as gaming, detachables, Chromebooks and Millennial PCs (in China). For example, Lenovo’s gaming and Chromebook shipments were up 20.5 and 38.2 percent respectively in the fourth quarter. Meanwhile Lenovo’s detachables grew at a double digit premium compared to the market, and Millennial PC continued its rapid rise in China with triple digit growth for the fourth quarter in a row.

Lenovo’s Mobile Business Group (MBG), which includes Moto and Lenovo-branded smartphones, saw 19.7 percent revenue growth in the fourth fiscal quarter outside of China,

with total sales of US$1.7 billion. Fourth quarter smartphone shipments increased 17.4 percent to 11.3 million units outside China, beating the market significantly by 12.8 points. For the full year ended March 31, 2017, overall sales were down 5.4 percent and pre-tax income margin decreased 1.9 points outside China.

In Asia Pacific and Latin America, led by success in India and Brazil respectively, Lenovo’s mobile business continued to improve throughout the year. In Western Europe, shipments were up in France, Germany and the UK, while in North America, Lenovo’s channel expansion plans are on track. In China, Lenovo added new leadership, re-aligned its strategy and product portfolio, and cleared inventory to introduce a new product lineup.

Published in Finance

Apple Inc. reported strong Q4 results on Tuesday, 31 January, ending a streak of previous unfavorable financial reports in 2016. A rebound in iPhone sales saw Apple’s profits lifted to record revenue in the past quarter which has eased concerns of slowing growth for the company.

Apple launched its new iPhone 7 model last September which proved to be a strong money-maker for the company, even as profits dipped 2.6 percent to $17.9 billion. Apple’s revenue reached an all-time record $78.4 billion compared with $75.9 billion in the same period the year before, according to the company’s earnings update for the fiscal first quarter ending in December.

In addition, Apple saw its shares rise more than three percent to $125.19 in after-market trades that followed the release of its earnings results. The report shows that Apple sold 78.3 million iPhones during the primetime holiday shopping period, which was up five percent from the same time the previous year.

iPhones account for Apple’s main source of revenue, therefore the strong sales will ease investor concerns after the company experience three quarters of sales decline.

“We’re thrilled to report that our holiday quarter generated Apple’s highest quarterly revenue ever, and broke multiple records along the way,” said Apple chief executive, Tim Cook in the earnings release. “We sold more iPhones than ever before and set all-time revenue records for iPhone, services, Mac and Apple Watch.”

Cook added that revenue grew from online services and digital content, which was led by unprecedented customer activity at Apple’s online App Store, which welcomed 2017 with its busiest single day ever on New Year’s Day (Jan. 1), capping a record-breaking holiday season and a year of unprecedented developer earnings and breakout app hits.

“I have not yet done the numbers, but I think Apple had the best quarter in the history of humanity,” said Asymco analyst Horace Dediu in a comment on Twitter. The only place where Apple didn’t see such strong growth was in China, where it saw revenue drop 12 percent to $16.2 billion, according to the earnings report.

Speaking about the success of Apple’s iPhone 7 which clearly sold well, Neil Saunders, managing director of the research firm GlobalData Retail, said: “While it is arguably not a groundbreaking step forward in terms of new features and functionality, it is clear that Apple did enough to stimulate interest and persuade many consumers to upgrade.”

Published in Finance

California-based Alphabet, parent company of Google, reported strong profit growth on Thursday, 26 January, for the final three months of 2016. The company saw its profits rise on growth in mobile search and its video-sharing service YouTube. Google remains as Alphabet’s majority operating unit and advertising is still the company’s main source of profit.

According to Alphabet its net income increased eight percent to $5.3 billion, which wasn’t as high as industry predictions on Wall Street, despite better-than-expected revenue. For earnings purposes, Alphabet categorizes operations such as self-driving cars and Nest smart thermostats into an “Other Bets” category, which almost doubled revenue to $262 million in the quarter, but still posted a loss of nearly $1.1 billion.

Alphabet’s revenue in the final quarter of last year reached $26 billion, up 22 percent from the same period the previous year. However, the company’s shares dropped more than two percent to $838 in after-market trade that followed the release of the earnings figures.

Alphabet chief financial officer Ruth Porat said in a release, “Our growth in the fourth quarter was exceptional,” crediting mobile search and YouTube which drove the high performance. “We’re seeing great momentum in Google’s newer investment areas and ongoing strong progress in Other Bets.”

Alphabet, under its new structure, is said to be expanding beyond its role as a search engine that provides advertising linked to queries. The company last year leveled up to its rivals Apple, Samsung and Amazon by pushing into hardware, launching premium-priced, in-house designed artificial intelligence products.

Google also revealed its new "home assistant" which aims to compete with Amazon's Alexa-powered devices as a hub for the smart home, and has been working to become the platform for some connected cars. During an earnings call, Google chief executive Sundar Pichai said he is deeply involved with the company’s push into artificial intelligence, believing there is a lot of potential in digital assistance to make services such as mobile search more helpful to users.

“In the long run, I think we will evolve from a mobile first to an AI first world,” said Pichai. “We are at the forefront and pushing and pushing hard and getting there.” According to Porat, the bulk of the money taken in came from "Other Bets" came from Nest, Verily, and a Fiber unit building super-fast internet lines in select US cities.

It was recently announced that Singapore-based sovereign based fund Temasek will invest $800 million in Verily, the Alphabet subsidiary focused on healthcare. The infusion of cash, for which Temasek will get a minority stake, comes as Verily works to bring some of its creations to market. Verily was known as Google Life Sciences but rebranded after the internet giant became Alphabet in a corporate restructuring.

Verily specializes in applying technology to problems in health and biology. Among the ideas discussed has been building a sickness-sensing diagnostic device along the lines of the "tricorder" seen in "Star Trek" science fiction films and television shows.

 

 

Published in Finance