Displaying items by tag: Q3

TELUS reports strong financial results for Q3

Written on Sunday, 11 November 2018 09:00

TELUS Corporation today released its unaudited results for the third quarter of 2018. For the quarter, the operator consolidated operating revenue of $3.8 billion increased by 11 per cent over the same period a year ago.

This growth was driven by higher wireless network and equipment revenues, wireline services revenue growth and higher other operating income resulting from our share of the non-recurring equity income related to real estate joint ventures of $171 million arising from the sale of TELUS Garden. Excluding this equity income consolidated operating revenue increased by 5.8 per cent.

Earnings before interest, income taxes, depreciation and amortization (EBITDA) increased by 8.2 per cent to $1.3 billion due to higher revenue growth as referenced above and improved wireless equipment margins.

This growth was partly offset by incremental employee benefits expense due to recent business acquisitions and increased costs to support our growing customer base. Adjusted EBITDA was up 6.4 per cent when excluding the net gain from the sale of TELUS Garden, as well as restructuring and other costs, which included our committed donation of $118 million to the TELUS Friendly Future Foundation.

“TELUS reported strong operational and financial results for the third quarter, including robust customer growth across both the wireless and wireline segments of our business. This was buttressed by a continued excellent performance in wireless and wireline customer loyalty and lifetime revenue,” said Darren Entwistle, President and CEO. “Importantly, the TELUS team continues to achieve industry-leading postpaid wireless churn, and realized record third quarter high-speed Internet and TV retention levels. This performance was driven by our team’s relentless focus on providing exceptional customer experiences, and was anchored by the ongoing generational investments we are making in our leading broadband wireline and wireless networks, both of which are hallmarks of TELUS’ successful, long-term growth strategy.”

Mr. Entwistle added, “The efficacy of our broadband technology investments is reflected in TELUS, once again, being named as having the fastest mobile network in Canada by PCMag. This repeat acknowledgement builds on our outstanding record of achievement with respect to network excellence, having already earned the top spot in all major mobile networks reporting this year, including Ookla, J.D. Power and OpenSignal. These leading network rankings, each received consecutively for two or more years, reinforce the consistent superiority of TELUS’ broadband networks available to citizens across the country.

Mr. Entwistle further commented, “Our dividend increase announced today, on the back of our 41 per cent free cash flow growth, reflects the sixteenth increase since 2011, and is the fourth in our most recent three-year dividend growth program, targeting annual growth between seven and 10 per cent through 2019. This builds on our proven track record of providing investors with the industry’s best multi-year dividend growth program, which continues to generate significant value for our shareholders. Notably, TELUS has now returned $16 billion to shareholders, including $10.8 billion in dividends, representing $27 per share since 2004. We look forward to updating investors on the progression of this program at our 2019 annual general meeting.”

Doug French, Executive Vice-president and CFO said, “For the third quarter of 2018, TELUS delivered positive operational and financial results, reflecting the strength of our multiple product and valued service offerings, our commitment to customer service excellence and our network superiority. Our strategic capital investments are clearly paying off, as evidenced by our strong subscriber and loyalty results, and position us to maintain our network leadership as we progressively move towards the arrival of 5G.”

Mr. French added, “As we head into the seasonally important final quarter of 2018, we remain focused on executing against our strategy, amplifying our efforts on cost efficiency, focusing on margin accretive customer growth and investing to support our growth strategy. Today we are raising our full year 2018 assumption for restructuring and other costs, including an additional $50 million targeted towards further streamlining our business and enhancing our effectiveness in serving our growing customer base. This additional investment in restructuring, to be recorded in the fourth quarter of 2018, is expected to deliver annual cost savings of more than $50 million beginning next year. Meanwhile, our net debt to EBITDA leverage ratio continues to improve, putting us in good position for 2019.”

Published in Telecom Operators

Qualcomm’s Q4 results reflect ongoing dispute with Apple

Written on Thursday, 09 November 2017 09:54

Qualcomm Incorporated announced results for its fiscal fourth quarter and year ended September 24, 2017. The company reported revenues of $5.9 billion for Q4 2017 compared to $6.2 billion in Q4 2016 (5 percent drop). Qualcomm said the results were negatively impacted by its ongoing dispute with Apple.

The company also highlighted a previously disclosed dispute with another licensee, who underpaid royalties to Qualcomm due in the second quarter of fiscal 2017 and did not report or pay royalties due in the third and fourth quarter. Qualcomm said it expects the licensees will continue to take such actions in the future until the disputes are resolved.

Qualcomm Incorporated CEO, Steve Mollenfopf, remained positive, saying the results reflect “continued product leadership and profitability improvement in our semiconductor business, including strength in adjacent opportunities outside mobile.”

Mollenkopf said the company continues to see “strong growth trends for global 3G/4G device shipments and are focused on protecting the established value of our technologies and inventions. We are leading the industry to 5G and are well positioned with our product and technology leadership to continue our expansion into many exciting new product categories, such as automotive, mobile computing, networking and the Internet of Things.”

In addition to the Apple dispute, Qualcomm’s Q4 results were negatively affected by an $868 million fine imposed by the Korea Fair Trade Commission (KFTC) in the first quarter of 2017; as well as a $974 million reduction to revenues related to the BlackBerry arbitration decision in the second quarter; and a $778 million fine imposed by the Taiwan Fair Trade Commission (TFTC), which was accrued in the fourth quarter.

Also affecting Qualcomm’s results, during the fiscal year, the company deposited $2 billion to collateralize the letters of credit related to its proposed acquisition of NXP, which was recorded as other noncurrent assets at the end of the third and fourth quarters of fiscal 2017.

On October 27, 2016, Qualcomm announced a definitive agreement to acquire NXP Semiconductors N.V. for estimated total cash of $38 billion to be paid to shareholders. NXP is a leader in high-performance, mixed-signal semiconductor electronics in automotive, broad-based microcontrollers, secure identification, network processing and RF power products. The transaction is subject to receipt of regulatory approvals.

Published in Finance

Emirates Integrated Telecommunications Company PJSC, the parent company of “du” and “Virgin Mobile UAE”, published its financial results for the quarter ended 30 September 2017, showing a 4 percent growth in net profit after royalty to AED 476 million.

Revenue was “stable” according to EITC chief executive officer, Osman Sultan, at AED 3.13 billion, compared to AED 3.14 billion in Q3 2016, as the company “invests in adjacent business areas to transition to its next phase of growth.”

“We continue to see pressure on mobile rates, with mobile revenue decreasing 3.3 percent to AED 2.30 billion,” said Mr. Sultan. “We remain on track with our strategy of attracting higher quality customers and are pleased to report that the post-paid segment increased 14 percent in Q3 2017 compared to the same period last year.”

Mr. Sultan added, “EBITDA was AED 1.33 billion in Q3 2017, compared to AED 1.38 billion for the same period last year, showing a decline year on year as the company invests in adjacent business areas to transition to its next phase of growth.”

Mr. Sultan highlighted the launch of Virgin Mobile UAE as an exciting milestone of Q3 for EITC. “Featuring an innovative, all-digital platform, Virgin Mobile is ushering a new era of connectivity and simplicity for our customers, while also reinventing the traditional telecom business to a more efficient and lower cost base operating model,” he said.

As the company looks towards a “smart future”, Mr. Sultan said EITC is investing in pushing forward its digital transformation agenda and driving the company to its next phase of growth as a fully integrated ICT player.

“Our increased reliance on the IoT has fundamentally changed the way people interact and we therefore must change the way we do business,” he said. “To this end, we announced a significant change in our organizational structure with the creation of three new business divisions to support EITC’s growth.”

Mr. Sultan added, “The newly formed ICT Solutions division will provide UAE government entities and enterprises with advanced end-to-end ICT infrastructure and services; the Digital Lifestyle and Innovation division will be focused on the development of innovative products and services for UAE consumers, including smart home services, and the Infrastructure division will consolidate all infrastructure, network and data center operations under the EITC umbrella.”

As part of the new organizational model, Mr. Sultan announced the nominations of Fahad Al Hassawi and Farid Faraidooni as Deputy CEOs, each with oversight and mandate on specific areas. “I have the upmost confidence that together we will successfully drive EITC’s transformation agenda and allow expansion into new areas of growth,” he said.

Published in Finance

Nokia released its Q3 financial results for 2017 showing net sales of €5.5 billion for the quarter compared to €6 billion for the same period last year. The company reported a 7 percent year-on-year sales decrease in Q3. Nokia CEO Rajeev Suri said the company’s patent licensing business was the “clear highlight” of the quarter.

“We reached a favorable arbitration outcome with LG and have since reached an agreement with them on a license for a longer term than what was set out in the arbitration,” Suri said. “With this fast and effective execution against our patent licensing strategy, we have approximately doubled our recurring licensing revenue from €578 million in 2014.”

Suri said he was pleased that in 2017, the growth in patent licensing helped to offset the sales decline on the Networks side. “We have excellent momentum and considerable opportunity to further develop the business in 2018 and beyond,” he said.

The company saw strength in parts of its Networks business in Q3. On the sales side, Nokia saw constant currency year-on-year growth in Global Services and IP Routing as well as in its Middle East and Africa, and Asia-Pacific regions. Orders were up in many areas, according to Suri, including Applications & Analytics, which logged its fifth consecutive quarter of order growth in Q3, showing the progress being made to build a strong, stand-alone software business.

On the profitability side, the overall Networks gross margin of 38.6 percent was up compared to one year ago, a “remarkable achievement” Suri said, in the “context of a market that remains challenging”. In addition, Global Services and IP Networks and Applications delivered improvements for Nokia in operating margin compared to Q3 2016, at 8.1 percent and 10.7 percent, respectively.

Suri said the company continued to build momentum in its strategy to expand customer base beyond communication service providers. Across the adjacent segments that Nokia’s targeting, year-to-date orders were up by double-digit percentages and sales were up by 8 percent, excluding the former Alcatel-Lucent third-party integration business that the company is currently winding down.

“We also added more than 60 new customers in these adjacent segments so far this year, including China Pacific Insurance Company, the first large enterprise win for our Nuage business in China,” Suri said. “With cable operators, we won the first customer - WOW! in the United States - for our new products coming from the acquisition of Gainspeed, which we are also trialing with almost a dozen customers, including some of the industry's largest players.”

These results, he said, “reflect the power of our disciplined operating model and the advantages of our end-to-end portfolio.” In a market where competition remains robust, operational discipline is a must, he added, and it is a “core strength of Nokia.”

Furthermore, as the market transitions to 5G, Suri said he believes that the benefits of Nokia’s portfolio will become even more apparent given that 5G is about much more than Radio. It requires Cloud core, IP routing, transport of many kinds, fixed wireless access, Software-Defined Networking and more - and Nokia is one of the few companies that are able to meet all those needs.

Nokia experienced some challenges in its Mobile Networks business and saw a continued decline in its primary addressable market in 2018. That decline, which the company estimates to be in the range of 2 percent to 5 percent, is the result of the multiple technology transitions underway; robust competition in China; and near-term headwinds from potential operator consolidation in a handful of countries.

“In terms of the issues we are facing in Mobile Networks, I have noted in previous quarters that the R&D team in this business group has faced an extraordinarily high workload,” Suri said. “Given this situation, we have seen some issues with the time taken to merge some products that have, unfortunately, impacted a small number of customers. As a result, Mobile Networks has experienced both revenue pressure and an increase in expected network equipment swap costs.”

He said the company is “committed to getting these things back on track and we are already seeing meaningful improvements”. Field deployments of Nokia’s new AirScale products were ramping up in all the company’s geographies, including with key North American customers. These products help improve operator competitiveness, Suri said, not just by addressing cost challenges, but also by setting a new standard for performance and flexibility.

Suri also noted that despite some additional investment required in Mobile Networks to maintain product leadership, Nokia is committed to its €1.2 billion cost savings plan in full-year 2018. These savings come at a slightly higher cost than previously expected, and Nokia will continue to assess opportunities to deliver further savings in the area of cost-of-goods sold.

“Regarding our cash position, I am not satisfied with our performance in the third quarter and we are redoubling our efforts in this area. Maintaining our strong balance sheet is a clear priority,” said Suri. “In short, Q3 was a period in which we faced some challenges, but delivered good performance in many areas as well as momentum in the execution of our strategy.”

Published in Finance

Ericsson reports 6 percent year-on-year drop in Q3 revenue

Written on Sunday, 29 October 2017 12:11

Swedish telecom equipment provider Ericsson published its Q3 financial results on October 20. The company reported a 6 percent year-on-year drop in third quarter revenue which accounted for SEK47.8 billion ($5.9 billion) while the loss was SEK4.8 billion ($590 million), worse than last year’s, reaching $24.5 million.

“We continue to execute on our focused business strategy,” said Ericsson President and CEO Borje Ekholm. “While more remains to be done, we are starting to see some encouraging improvements in our performance despite a continued challenging market.”

Networks showed a slight sales growth year over year. Networks adjusted operating margin was 11 percent. While losses continue in IT & Cloud, said Mr. Ekholm, the company sees increased stability in product roadmaps and projects.

“The general market conditions continue to be tough,” he said. “Sales adjusted for comparable units and currency declined by -3 percent year-on-year. Sales in North America, adjusted for comparable units, currency and the rescoped managed services contract were stable. We also saw growth returning in several countries as operators are increasing their investments in network capacity.”

Mainland China declined for Ericsson as the market is normalizing following a period of significant 4G deployments, representing more than 60 percent of global 4G volumes in the industry. The company managed to increase its LTE market shares in Mainland China to position Ericsson in 5G. However, this will have a dilutive effect on gross margin in Mainland China in Q4 2017, but the ambition is to continue to deliver double digit adjusted operating margin in Networks in Q4 2017.

Sales in Networks grew for Ericsson. Higher hardware capacity sales and a more competitive product portfolio resulted in an adjusted operating margin of 11 percent. The Ericsson Radio System portfolio, accounting for 55 percent of total radio volumes year to date, is proving competitive, Mr. Ekholm said, contributing both to improved earnings and a stronger market position.

In IT & Cloud, sales declined and losses increased in the quarter for Ericsson. The increase in quarter-on-quarter losses is largely due to higher amortization than capitalization of development expenses.

“Our turn-around plan builds on stability, profitability and growth in that order,” said Ekholm. “The initial focus has been on stabilizing both product roadmaps and challenging contracts. We have made good progress in the quarter. However, securing deliveries on large transformation projects puts pressure on gross margin in the near term.”

“The IT & Cloud business is of strategic importance as our customers are preparing for 5G and will digitalize their operations and invest in a future network architecture based on software-defined logic,” Mr. Ekholm added.

Ericsson will now expand its focus to improve profitability through increased efficiency in service delivery. In addition, the company will scale the software part of the business mix and increase the level of pre-integration services, which will lead to a higher gross margin but lower services sales. Positive effects on gross margin are expected in 2018.

“Despite continued decline in legacy product sales, there is good traction in our new media portfolio with several important wins in the quarter,” said Mr. Ekholm. “We have accelerated our efficiency measures and continue to pursue strategic opportunities for this business. Managing our cash is a top priority.”

Ekholm concluded, “We remain fully committed to our focused business strategy. We continue to invest to secure technology leadership and year to date we have recruited more than 1,000 R&D employees in Networks. Customers give positive feedback on both our long-term strategy and on our current 5G-ready portfolio.”

Published in Finance

Etisalat Group’s net profit up 29% year-on-year

Written on Sunday, 29 October 2017 10:48

UAE telecom company Etisalat Group, which operates and owns subsidiaries in Middle East, Africa and Asia, released its consolidated financial statement on October 25 for the three months ending 30 September. Consolidated net profit after Federal Royalty amounted to AED 2.4 billion resulting in a net profit margin of 19 percent and increased year-on-year by 29 percent. The company’s consolidated revenues amounted to AED 12.9 billion.

Etisalat Group’s UAE branch saw a 3 percent revenue increase year-on-year amounting to AED 7.6 billion. The UAE branch’s net profit amounted to AED 2.0 billion representing 4 percent increase year-on-year. Etisalat’s UAE subscriber base grew 2 percent year-on-year to reach 12.5 million. The company’s aggregate subscriber base reached 140 million up slightly from 139 million in Q2.

“Etisalat continues to deliver solid performance in the third quarter, despite the prevailing global economic challenges and the vastly transforming industry,” said Etisalat Group CEO Saleh Al Abdooli. “We are on the verge of entering a new era, which transcends any technological disruption we ever witnessed, and will be altering and reshaping our society and industry on a large scale.”

In Q3 2017, Etisalat signed a strategic partnership as part of Dubai Future Accelerators program to bring future medical care solutions to UAE and the MENA region. The company successfully completed the fastest 5G live trial globally reaching 71Gbps, and launched 4G services in Egypt through its subsidiary Etisalat Misr. Etisalat also launched a new brand ‘Swyp’ targeting youth in UAE.

“Etisalat is confidently moving forward and progressing positively in enriching lives and enabling societies across its footprint,” said Mr. Al Abdooli. “As a group, we will always assure a vigorous portfolio that is generating synergy, focusing on customer experience, growing value, and operating as one family.”

Mr. Al Abdooli added, “As we look back at our achievements, we sense and honor the great support that was extended to us by the wise leadership of the UAE, who did not only enable the creation of a world class telecom sector, but are also leading the way and acting as role models in technology adoption. Appreciation is also extended to our shareholders and loyal customer, to whom we owe more success and greater achievements.”

Published in Finance

Etihad Etisalat (Mobily) in Saudi Arabia reported a Q3 loss, blaming a requirement introduced last year that customers had to register their fingerprint with SIM cards. The company’s net losses increased by 5 percent to 174.5 million riyals ($46.53 million) it said in a statement to the Saudi bourse. Revenue also dropped 4.3 percent to 2.8 billion riyals.

Mobily said introducing the fingerprint registration rule led to an “erosion” of its customer base. The requirement was introduced last year by the Communications and Information Technology Commission, who instructed all SIM cards issued in Saudi Arabia to be linked to a fingerprint record held at the National Information Center.

Mobily competes with Saudi Telecom Company (STC) and Zain Saudi Arabia in the kingdom. In September, Mobily and Zain Saudi paid the first installments (30 percent of the total amount) for the acquisition of additional spectrum in the 1800MHz band. The new spectrum will be valid for fifteen years, after it goes into effect on January 1, 2018.

Mobily paid SAR126.9 (US$33 million) for its first payment installment and Zain KSA paid SAR 253.8 million (US$68 million), before the deadline of September 11. The fees must be paid in equal installments (7 percent of the total each) over ten years, with the first installment due in 2019.

Published in Finance

Apple’s revenue up 7% year-on-year in quarterly results

Written on Sunday, 06 August 2017 13:10

Apple posted quarterly revenue of $45.4 billion for its fiscal 2017 third quarter ended July 1, 2017, and posted quarterly earnings per diluted share of $1.67. These results compare to revenue of $42.4 billion and earnings per diluted share of $1.42 in the year-ago quarter. International sales accounted for 61 percent of the quarter’s revenue.

“With revenue up 7 percent year-over-year, we’re happy to report our third consecutive quarter of accelerating growth and an all-time quarterly record for Services revenue,” said Tim Cook, Apple’s CEO. “We hosted an incredibly successful Worldwide Developers Conference [WWDC] in June, and we’re very excited about the advances in iOS, macOS, watchOS and tvOS coming this fall.”

Apple beat Wall Street analyst predictions who expected on average Apple to post $44.49 billion in revenue and earnings per share of $1.56. Apple CEO Tim Cook talked about a "pause" in iPhone sales in May ahead of the release of the iPhone 8 this September which is expected to have a new design and represent a major upgrade that could spur sales.

Ahead of the results, Drexel Hamilton analyst Brian White said Apple's quarterly results and outlook would be “less important” as investors are “focused on the iPhone 8 this fall, along with the company's capital distribution initiative, depressed valuation and new innovations showcased at WWDC.”

Luca Maestri, Apple’s CFO said, “We reported unit and revenue growth in all our product categories in the June quarter, driving 17 percent growth in earnings per share. We also returned $11.7 billion to investors during the quarter, bringing cumulative capital returns under our program to almost $223 billion.”

Apple provided guidance for its fiscal fourth quarter predicting revenue between $49 billion and $52 billion, and gross margin between 37.5 percent and 38 percent. The company predicts operating expenses between $6.7 billion and $6.8 billion, and other income/expenses of $500 million.

Apple’s board of directors declared a cash dividend of $0.63 per share of the company’s common stock. The dividend is payable on August 17, 2017 to shareholders of record as of the close of business on August 14, 2017.

Published in Finance

Qualcomm reports $5.4 billion in quarterly revenues

Written on Wednesday, 26 July 2017 08:30

Qualcomm reported revenues of $5.4 billion for the three months to 25 June in 2017 and highlighted better than expected results in its semiconductor business. Due to Apple’s ongoing licensing dispute with Qualcomm, the company’s revenue was down 11 percent year on year, but CEO Steve Mollenkopf remains positive.

Mollenkopf said the company “retained the high ground” and said the long-term outlook for the licensing segment of its business “remained strong”. The company did, however, offer a warning in its earnings statement that the dispute with Apple could negatively affect its results for fiscal Q4.

“As you know, we have a strong relationship with Apple for many years and they have been a standing and value partner,” said Mollenkopf. “We intend to continue to provide them with our industry leading products and technologies as we always have, and do our best to remain a good supplier to Apple even while the dispute continues.”

Apple’s contracted manufacturers have withheld royalty payments to Qualcomm; therefore the company did not post specific device-related figures for the period. On the other hand, Qualcomm’s subsidiary that deals with chip sales generated a generous 58 percent year on year increase in pre-tax earnings to $575 million.

“We delivered better than expected results in our semiconductor business this quarter, which drove EPS above the midpoint of our expectations versus our April updated guidance,” said Mollenkopf in a statement.

“Our products and technologies continue to enable the global smartphone industry, and we are expanding into many exciting new product categories, including automotive, mobile computing, networking and IoT. We believe that we hold the high ground with regard to the dispute with Apple, and we have initiated new actions to protect the well-established value of our technologies.”

The dispute between Apple and Qualcomm over licensing terms have been going on since January and seen lawsuits launched by both sides. Qualcomm filed a complaint with the United States International Trade Commission (ITC) earlier this month alleging that Apple has engaged in the unlawful importation and sale of iPhones that infringe one or more claims of six Qualcomm patents covering key technologies that enable important features and functions.

Qualcomm requested that the ITC institute an investigation into Apple’s infringing imports and ultimately issue a Limited Exclusion Order (LEO) to bar importation of those iPhones and other products into the United States to stop Apple’s “unlawful and unfair use of Qualcomm’s technology”.

The company is seeking the LEO against iPhones that use cellular baseband processors other than those supplied by Qualcomm’s affiliates. Additionally, Qualcomm is seeking a Cease and Desist Order barring further sales of infringing Apple products that have already been imported and to halt the marketing, advertising, demonstration, warehousing of inventory for distribution and use of those imported products in the United States.

“Qualcomm’s inventions are at the heart of every iPhone and extend well beyond modem technologies or cellular standards,” said Don Rosenberg, executive vice president and general counsel of Qualcomm. “The patents we are asserting represent six important technologies, out of a portfolio of thousands, and each is vital to iPhone functions.  Apple continues to use Qualcomm’s technology while refusing to pay for it. These lawsuits seek to stop Apple’s infringement of six of our patented technologies.”

Published in Finance

Ericsson announced its Q3 results on October 12 which were “significantly lower” than expected, according to CEO Jan Frykhammar. The unfavorable results come after a tumultuous period for the company which announced it will be axing 3,000 employees in its home country of Sweden. Shares in Ericsson lost more than a sixth of their value. Ericsson shares, which have lost more than half their value in the last 18 months, plunged more than 17.5 percent shortly after trading opened.

Ericsson fired chief executive Hans Vestberg in July after seven years in the post. During his tenure, it struggled against competition from rivals Nokia, Siemens and Alcatel-Lucent and failed to make inroads in saturated and competitive markets such as Europe and North America.

Sales sunk 14 percent between July and September compared to the same period a year earlier, to 51.1 billion kronor (5.2 billion euros, $5.8 billion), Ericsson said in a statement. Operating income is expected to be 300 million kronor for the third quarter compared to 5.1 billion in the third quarter of 2015, it said, citing poor demand in Russia and other developing markets.

"The sales decline was mainly driven by markets with weak macro-economic environments such as Brazil, Russia and the Middle East, impacting both coverage and capacity sales in those markets,” the report said. "In addition, capacity sales in Europe were lower following completion of mobile broadband projects in 2015.”

Jan Frykhammar, president and CEO, said the results were "significantly lower" than expected and that "current trends are expected to continue short-term". Final results are expected on October 21.

Published in Finance
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