Weekly Tech Business Recap: Facebook Phone, Spotify Takes on Pandora
Xerox (NYSE:XRX) reports its first quarter numbers. Earnings per share of 23 cents exceeds consensus by 1 cent, while revenue of $5.5 billion is constant year-to-year and in-line. Net profit was down by 4.3 percent to $269 million, for which restructuring charges and weaker margins were blamed. Revenue from services (one half of total sales) rose 10 percent, while tech revenue slid 5 percent. In addition, Xerox says that it plans to repurchase as much as $1.1 billion in shares, and issues second fiscal quarter earning per share guidance of 25 to 28 cents, which beats consensus of 23 cents; and a fiscal year earnings per share guidance of between $1.12 and $1.18.
Qualcomm (NASDAQ:QCOM) reports that it has licensed Internet protocol from Imagination Technologies (IGNMF.PK), which is most noted for its graphics processing unit licensing arrangement with Apple and Samsung. The current deal with QCOM is related to Imagination’s Ensigma cores, which are used to handle mobile TV, FM radio, and Wi-Fi processing, as the company seeks to reinforce the multimedia capabilities of its Snapdragon processors, and also to rival Broadcom’s leadership in the mobile phone Wi-Fi chip market.
Microsoft (NASDAQ:MSFT) goes proactive against the much expected launch of Google Drive (NASDAQ:GOOG), by introducing paid tiers for its SkyDrive cloud storage service, to go with the 25 gigabyte per year of capacity that it provides without charge. Further, MSFT’s prices will be significantly lower than those of Dropbox, which currently boasts more than 50 million users, while it retains a major advantage in terms of third-party app and service support.
Facebook (FB) posts first quarter revenue of $1.06 billion, which is notably up from its $731 million in the same period in 2011, and, from its amended S-1 a total of monthly active users of 901 million, up from 845 million at the end of the previous quarter. Also, net income of $205 million compared to $223 million year-to-year was reported, along with cost of revenue of $277 million ($167 million last year), and total costs and expenses of $677 million vs. $343 million in 2011. In addition, Facebook says that it paid $300 million in cash, plus around 23 million in shares for Instagram, which leans that if the purchase price was $1 billion, its shares translated to a price of approximately $30. Meanwhile, FB will buy a portion (650) of the patents and patent applications Microsoft (NASDAQ:MSFT) acquired from AOL for $550 million in cash; it had tried to buy all of the patents but MSFT got 275 of them.
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Nokia (NYSE:NOK) gets an unsolicited appraisal from Fitch, in which the tech company is downgraded from BBB- to BB+ (junk status), even though it posted €4.9 billion in net cash. Worse, the analyst says that it might cut the ratings even more unless Nokia’s performance shows some improvement during the second half of the year, and in 2013.
AT&T’s (NYSE:T) first quarter results foretell new worries for smartphone chipmakers, as total domestic sales of the device fell 41 percent quarter-to-quarter to 5.5 million. However, the company’s 43 percent first quarter drop in iPhone sales, which was much worse that Verizon’s 24 percent, caused only a modest decline in shares. This is not good news for Apple (NASDAQ:AAPL) either, which now must ponder its international sales and whether they can make up the difference. AT&T Earnings Cheat Sheet>>
IBM’s (NYSE:IBM) quarterly dividend has been raised by the board by 13 percent, to 85 cents per share, amounting to an annual yield of 1.7 percent. In addition, an additional stock repurchase of $7 billion has been authorized, which would raise its total amount to $12.7 billion.
Early June is the date for a Microsoft (NASDAQ:MSFT) “release preview” for Windows 8, which will represent the final version ahead of the official systems introduction that is scheduled for October. The February consumer preview was said to have been received with mostly positive feedback. What’s the Future of Microsoft’s Stock?>>
Shares of Texas Instruments (NYSE:TXN) have an up and down day, following the firm’s first quarter beat. Industry-wide worries about the huge plunge in wireless chip sales are said to have led shares down at midday. In an earnings conference call executives confirmed that sales of its “connectivity” products such as Wi-Fi chips were soft, along with an expected fall in baseband chip sales, the business of which the company is exiting. Analysts wonder if TI is losing market share to Wi-Fi chip leader Broadcom (NASDAQ:BRCM).
Apple (NASDAQ:AAPL) is violating a Motorola Mobility (NYSE:MMI) patent, says an ITC judge, but not three other patents for which Motorola is claiming infringement. A final ruling by the commission is expected in August, and meanwhile the company is locked into a battle with Apple in Germany.
Google (NASDAQ:GOOG) officially introduces Google Drive, to mixed reviews. Walt Mossberg likes its feature set, but wants improved support for Office docs. ReadWriteWeb appreciates the service’s OCR and image-recognition features, but not its limited cross-platform support. Dropbox CEO Drew Houston remarks that his company is now launching a search engine.
The Facebook (FB) phone could come as soon as the third quarter, says Digitimes. The phone will feature a custom version of Android, and it’s also reported that FB is working on it with HTC. At the same time, Google (NASDAQ:GOOG) says it will work with Samsung for its next Nexus phone, which could worsen the worries of Motorola Mobility (NYSE:MMI) investors, though Google has confirmed that its Nexus projects would remain open to third parties.
AT&T’s (NYSE:T) proposed spectrum transfers to T-Mobile USA (DTEGY.PK) gets an okay from the FCC. The transfer is a component of the $4 billion merger breakup fee paid by AT&T to T-Mobile, and should help the latter to implement its 4G investment program. At the same time, that company is asking the FCC to disallow
Verizon’s spectrum purchases.
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Shares of Motorola Solutions (NYSE:MSI) (which is not being sold to Google), reach new 52-week highs after its first quarter results exceed consensus. The figures benefitted from sales to the government, which outweighed a 2 percent fall in enterprise sales. The firm issued second quarter revenue guidance of $2.18 billion and earnings per share of between 65 and 70 cents, which beats the Street forecasts of $2.1 billion and 68 cents respectively, and also reaffirms its outlook for the current year.
Silicon Labs (NASDAQ:SLAB) on Wednesday defied the upwards trend for chips stocks, by selling off after a positive first quarter report that exceeded estimates, and a guidance for second quarter revenue of between $129.5 million and $134.5 million that beat a $129.7 million consensus. The selloff is being blamed on chatter that SLAB might opt out of a large growth initiative concerning its touch controllers for smartphones, due to tough Asian competition.
Nintendo (NTDOY.PK) posts a full-year 2012 operating loss of ¥37.3 billion against a (-) ¥41.4 billion consensus, with net revenue of ¥820 billion. The company reports that it will cease the sales of the Nintendo 3DS at below cost, and also predicts that its operating profit of ¥35 billion in fiscal 2013 will miss consensus of ¥40 billion.
Pandora (NYSE:P) is to get a challenge from Spotify. Spotify is said to be working on a personalized, ad-based, Internet radio service that could be introduced by the end of 2012. Spotify has only about 10 million registered users, which doesn’t really compare to Pandora’s 49 million, and it also doesn’t impact the larger company’s market share, but it has nonetheless been sen as a threat for quite some time. Meanwhile, Microsoft (NASDAQ:MSFT) is reportedly developing a music service, code-named Woodstock, that would rival Spotify’s current offerings. Woodstock would supplant Zune, which is being phased out, and would feature Xbox and mobile app support.
Oracle (NASDAQ:ORCL) has laid off workers across-the-board in its hardware unit, according to a source, as sales in that division dropped 11 percent year-to-year in its fiscal third quarter. The firm is experiencing heavy demand for its pricey engineered systems, but its UNIX lines continue giving up sales to Windows and Linux hardware. In addition, an ex-employee said on Wednesday that ‘top Oracle hardware salesmen are leaving en masse, partly due to internal dysfunction’.
Shares of TSMC (NYSE:TSM), the world’s biggest chip foundry, pop following its first quarter statement, in which earnings per share beat estimates by 3 cents and revenue by $120 million. Also, the company released guidance for second quarter sales of between $4.3 billion and $4.4 billion (consensus $3.9 billion) and raised its capital expenditures projections, which is boosting chip suppliers such as Lam Research (NASDAQ:LRCX) and KLA-Tencor (NASDAQ:KLAC).
The premier BlackBerry 10 phone by Research In Motion (NASDAQ:RIMM) will be announced in August and launched in October, says N4BB.com. The phone will have no physical keyboard (like the Torch line), but will be operated via a touchscreen, but a similar phone with a keyboard is due from RIMM in the first quarter of next year.