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Motorola posts $86 million Q1 loss, tops revenue estimates

Tuesday, May 1st, 2012

Motorola posts $86 million Q1 loss

Motorola Mobility on Tuesday reported its financial results for the first quarter. The struggling vendor managed $3.08 billion in sales, narrowly topping Wall Street’s $3.03 billion revenue estimates as Motorola continued to work toward the finalization of Google’s $12.5 billion acquisition. Motorola’s loss of $0.28 per share, or $86 million, missed analysts’ consensus by a penny per share, however. Revenue from the company’s mobile division increased 3% as Motorola shipped 5.1 million smartphones in the quarter, but total device shipments slid to 8.9 million units as demand dropped following the holidays. ”The introduction of RAZR MAXX marked another successful addition to the Motorola product family and contributed to our growth in smartphones,” Motorola Mobility CEO Sanjay Jha said. “Our Home business delivered another solid quarter highlighted by improvement in year-over-year profitability. We continue to work closely with Google to complete the proposed merger during the first half of the year.” Motorola’s full press release follows below.

Motorola Mobility Announces First Quarter Financial Results

LIBERTYVILLE, Ill., May 1, 2012 /PRNewswire/ –

First Quarter Financial Highlights

  • Net revenues of $3.1 billion
  • Non-GAAP net loss of $0.03 per share compared to net loss of $0.08 per share in first quarter 2011; GAAP net loss of $0.28 per share compared to net loss of $0.27 per share in first quarter 2011
  • Mobile Devices net revenues of $2.2 billion; Non-GAAP operating loss of $85 million; GAAP operating loss of $121 million
  • Shipped 8.9 million mobile devices, including 5.1 million smartphones
  • Home net revenues of $884 million; Non-GAAP operating earnings of $91 million; GAAP operating earnings of $68 million

Click here for printable press release and financial tables.

Motorola Mobility Holdings, Inc. (NYSE: MMI) today reported net revenues of $3.1 billion in the first quarter of 2012, up 2 percent compared to the first quarter of 2011. The GAAP net loss in the first quarter of 2012 was $86 million, or $0.28 per share, compared to a net loss of $81 million, or $0.27 per share, in the first quarter of 2011. On a non-GAAP basis, the net loss in the first quarter 2012 was $10 million, or $0.03 per share, compared to a net loss of $25 million, or$0.08 per share, in the first quarter of 2011.

The Company had operating cash outflow of $98 million in the first quarter. Total cash at the end of the quarter was $3.5 billion and includes cash, cash equivalents, and cash deposits.

Details on non-GAAP adjustments and the use of non-GAAP measures are included later in this press release and in the financial tables.

“The introduction of RAZR™ MAXX marked another successful addition to the Motorola product family and contributed to our growth in smartphones. Our Home business delivered another solid quarter highlighted by improvement in year-over-year profitability,” said Sanjay Jha, chairman and chief executive officer, Motorola Mobility. “We continue to work closely with Google to complete the proposed merger during the first half of the year.”

Operating Results

Mobile Devices net revenues in the first quarter were $2.2 billion, up 3 percent compared with the year-ago quarter. The GAAP operating loss was $121 million compared to an operating loss of $89 million in the year-ago quarter. The non-GAAP operating loss was $85 million compared to an operating loss of$61 million in the year-ago quarter. The Company shipped a total of 8.9 million mobile devices in the first quarter, including 5.1 million smartphones.

Mobile Devices highlights:

  • Launched RAZR™ MAXX, the longest-lasting 4G LTE smartphone, allowing customers to talk for over 21 hours on a single charge, and DROID 4 by Motorola, the thinnest and most powerful 4G LTE QWERTY smartphone.
  • Expanded budget-friendly smartphone portfolio in China, Europe, and Latin America with the introduction of MOTOLUXE, a slim touchscreen device and Motorola DEFY MINI, the ideal “life proof” device for the active consumer.
  • Teamed up with Bubba Watson, four time PGA Tour winner, including the 2012 Masters  to introduce MOTOACTV Golf Edition, a cutting-edge GPS golf tracker, virtual caddy and online clubhouse.

Home segment net revenues in the first quarter were $884 million, down 2 percent compared with the year-ago quarter. GAAP operating earnings improved to$68 million, compared to $53 million in the year-ago quarter. Non-GAAP operating earnings were $91 million compared to $81 million in the year-ago quarter.

Home highlights:

  • Introduced Connected Home Gateway, the industry’s first plug-and-play solution for home monitoring and control services.
  • Provided equipment and services to Asian Broadcasting Network for launch of Malaysia’s most advanced digital cable TV network.
  • Industry recognition of our Medios multi-screen software portfolio including SecureMedia® named “Best Rights and Asset Management Solution” at 2012 IPTV World Forum.
  • Announced global distributor and integrator agreement with Edgecast’s Content Delivery Network platform, enabling advanced multi-screen service delivery to consumers.

Merger Update

As previously announced on August 15, 2011, Motorola Mobility and Google Inc. (“Google”) (NASDAQ: GOOG) entered into a definitive agreement for Google to acquire Motorola Mobility for $40.00 per share in cash, or a total of approximately $12.5 billion.

Motorola Mobility and Google continue to work closely with the authorities in China for approval on the acquisition. The transaction has been investigated and cleared without conditions in all other jurisdictions with pre-closing clearance requirements. We continue to expect the transaction to close during the first half of 2012.

For more information on the proposed merger, please visit http://investors.motorola.com.

Conference Call and Webcast
In light of the pending acquisition of the Company by Google, the Company does not conduct a financial analyst conference call or webcast following the release of its earnings information nor provide financial guidance. To access the first quarter results and other financial information, please visithttp://investors.motorola.com.

Consolidated GAAP Results
A comparison of results from operations is as follows:

First Quarter
(In millions, except per share amounts) 2012 2011
Net revenues $3,078 $3,032
Gross margin 754 755
Operating loss (70) (36)
Loss before income taxes (69) (51)
Net loss ($86) ($81)
Basic loss per common share ($0.28) ($0.27)
Diluted loss per common share ($0.28) ($0.27)
Weighted average common shares outstanding
    Basic 302.4 294.7
    Diluted 302.4 294.7

Non-GAAP Adjustments for first quarter 2012 and 2011

First Quarter
Per Share Impact 2012 2011
GAAP Loss per Common Share ($0.28) ($0.27)
Merger-related costs * 0.06 ——
Stock-based compensation expense 0.16 0.14
Intangible assets amortization expense 0.04 0.05
Total Non-GAAP Adjustments ** 0.25 0.19
Non-GAAP Loss per Common Share ($0.03) ($0.08)

Definitions

*  Merger-related costs primarily consisting of legal and banking fees.

** Earnings or loss per share (EPS) impact may not add up due to rounding.

Use of Non-GAAP Financial Information
In addition to the GAAP results included in this presentation, Motorola Mobility also has included non-GAAP measurements of results. Motorola Mobility has provided these non-GAAP measurements to help investors better understand Motorola Mobility’s core operating performance, enhance comparisons of Motorola Mobility’s core operating performance from period to period, and allow better comparisons of Motorola Mobility’s operating performance to that of its competitors. Among other things, the Company’s management uses these operating results, excluding the identified items, to evaluate the performance of its businesses and to evaluate results relative to certain incentive compensation targets. Management uses operating results, excluding these items, because it believes this measurement enables it to make better period-to-period evaluations of the financial performance of its core business operations. The non-GAAP measurements are intended only as a supplement to the comparable GAAP measurements and the Company compensates for the limitations inherent in the use of non-GAAP measurements by using GAAP measures in conjunction with the non-GAAP measurements. As a result, investors should consider these non-GAAP measurements in addition to, and not in substitution for or as superior to, measurements of financial performance prepared in accordance with GAAP.

Non-GAAP adjustments are comprised of the following items:

Merger-related costs: The Company has excluded the effects of merger-related costs from its non-GAAP operating expenses and net income measurements because the Company believes that this item does not reflect expected future operating earnings or expenses and do not contribute to a meaningful evaluation of the Company’s current operating performance or comparisons to the Company’s past operating performance.

Stock-based compensation expense: The Company has excluded stock-based compensation expense from its non-GAAP operating expenses and net income measurements. Although stock-based compensation is a key incentive offered to our employees and the Company believes such compensation contributed to the revenue earned during the periods presented and also believes it will contribute to the generation of future period revenues – the Company continues to evaluate its performance excluding stock-based compensation expense primarily because it represents a significant non-cash expense. Stock-based compensation expense will recur in future periods.

Intangible assets amortization expense: The Company has excluded intangible assets amortization expense from its non-GAAP operating expenses and net income measurements, primarily because it represents a significant non-cash expense and because the Company evaluates its performance excluding intangible assets amortization expense. Amortization of intangible assets is consistent in amount and frequency but is significantly affected by the timing and size of the Company’s acquisitions. Investors should note that the use of intangible assets contributed to the Company’s revenues earned during the periods presented and will contribute to the Company’s future period revenues as well. Intangible assets amortization expense will recur in future periods.

Details of the above non-GAAP adjustments and reconciliations of the non-GAAP measurements to the corresponding GAAP measurements can be found in the financial tables.

Business Risks

Motorola Mobility cautions the reader that this communication includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Forward-looking statements include, but are not limited to, the expected closing date of the proposed Google transaction and the expected timeframe for regulatory decisions. Forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements including, but not limited to, the ability of the parties to consummate the proposed transaction and the satisfaction of the conditions precedent to consummation of the proposed transaction, including the ability to secure regulatory and other approvals at all or in a timely manner; and the other risks and uncertainties contained and identified in Motorola Mobility’s filings with the Securities and Exchange Commission (the “SEC”), any of which could cause actual results to differ materially from the forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. Motorola Mobility undertakes no obligation to update the forward-looking statements to reflect subsequent events or circumstances or update the reasons that actual results could differ materially from those anticipated in forward-looking statements, except as required by law.

 

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Apple and Samsung CEOs to meet on May 21st for settlement talks

Monday, April 30th, 2012

Apple and Samsung CEO meet May 21st to talk settlement

Apple and Samsung’s CEOs are scheduled to meet on May 21st to discuss a possible settlement to the widely-publicized on-going legal battle, FOSS Patents reported. The two companies have been in a bitter patent war since last April that includes more than 20 cases in 10 countries. Despite the scheduled settlement talks, however, the Korean manufacturer asserted eight additional patents against the Cupertino-based company last week. Apple CEO Tim Cook told analysts during the company’s earnings call that he would rather settle lawsuits than fight them in court. “I’ve always hated litigation, and I continue to hate it. We just want people to invent their own stuff,” the CEO said. “I would highly prefer to settle versus battle. But the key thing is that it’s very important that Apple not become the developer for the world.” If the two companies cannot come to an agreement, a trial is scheduled for July in the United States.

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Amazon crushes estimates in Q1, posts $130 million profit on $13.18 billion in sales

Thursday, April 26th, 2012

Amazon on Thursday reported its financial results for the first quarter of 2012. Analysts were looking for a profit of $0.07 per share on $12.86 billion in sales, and Amazon posted earnings of $0.28 per share on revenue of $13.18 billion, crushing expectations. The retailer netted $0.38 per share on revenue of $17.4 billion this past holiday quarter, and $0.44 per share on $9.86 billion in sales during the first quarter last year. The nationwide retailer’s stock had been up and down all week as Wall Street’s concerns over margins continued to rattle investors. Amazon’s operating margin fell 3.7% to 1.5% of global revenue in the fourth quarter and in the first quarter a year ago, Amazon’s margins sat at 3.3%. In the first quarter of 2012, Amazon’s operating margins stayed flat at 1.5%. For the second quarter, Amazon forecasts a profit of $40 million, up from a loss of $260 million in the second quarter last year, on revenue of between $11.9 billion and $13.3 billion. Amazon’s stock was up more than 8% percent in after-hours trading on Thursday. The company’s full press release follows below.

AMAZON.COM ANNOUNCES FIRST QUARTER SALES UP 34% TO $13.18 BILLION; 16 OF THE TOP 100 BESTSELLING TITLES ARE EXCLUSIVE TO THE KINDLE STORE

SEATTLE–(BUSINESS WIRE)–Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its first quarter ended March 31, 2012.

“I’m excited to announce that we now have more than 130,000 new, in-copyright books that are exclusive to the Kindle Store – you won’t find them anywhere else. They include many of our top bestsellers – in fact, 16 of our top 100 bestselling titles are exclusive to our store”

Operating cash flow increased 1% to $3.05 billion for the trailing twelve months, compared with $3.03 billion for the trailing twelve months ended March 31, 2011. Free cash flow decreased 39% to $1.15 billion for the trailing twelve months, compared with $1.90 billion for the trailing twelve months ended March 31, 2011.

Common shares outstanding plus shares underlying stock-based awards totaled 464 million on March 31, 2012, compared with 466 million a year ago. During the quarter, the Company repurchased 5.3 million shares, or $960 million, under its previously announced authorization to repurchase up to $2 billion of the Company’s common stock.

Net sales increased 34% to $13.18 billion in the first quarter, compared with $9.86 billion in first quarter 2011. Excluding the $56 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 34% compared with first quarter 2011.

Operating income was $192 million in the first quarter, compared with $322 million in first quarter 2011. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $4 million.

Net income decreased 35% to $130 million in the first quarter, or $0.28 per diluted share, compared with net income of $201 million, or $0.44 per diluted share, in first quarter 2011.

“I’m excited to announce that we now have more than 130,000 new, in-copyright books that are exclusive to the Kindle Store – you won’t find them anywhere else. They include many of our top bestsellers – in fact, 16 of our top 100 bestselling titles are exclusive to our store,” said Jeff Bezos, founder and CEO of Amazon.com. “If you’re an Amazon Prime member, you don’t even need to buy these titles – you can borrow them for free – with no due dates – from our revolutionary Kindle Owners’ Lending Library. The Kindle Owners’ Lending Library is heavily used by Kindle owners, and it has extremely unusual features that both authors and customers love. Every time you borrow a book, the author gets paid – and we have an inexhaustible supply of each title so you never have to wait in a queue for the book you want. Kindle is the bestselling e-reader in the world by far, and I assure you we’ll keep working hard so that the Kindle Store remains yet another reason to buy a Kindle!”

Highlights

  • Kindle Fire remains the #1 bestselling, most gifted, and most wished for product across the millions of items available on Amazon.com since launch. In the first quarter, 9 out of 10 of the top sellers on Amazon.com were digital products – Kindle, Kindle books, movies, music and apps.
  • Amazon launched Kindle Touch Wi-Fi and Kindle Touch 3G on Amazon.co.uk, Amazon.de, Amazon.fr, Amazon.it, and Amazon.es. The full line of Kindle e-ink readers is now available in over 175 countries around the world. Kindle Touch 3G is the most full-featured e-reader with an easy to use touchscreen and the unparalleled convenience of free 3G – no hunting for Wi-Fi spots, simply think of a book and download it. Kindle remains the bestseller on Amazon.co.uk, Amazon.de, Amazon.fr, Amazon.it and Amazon.es since their launches.
  • Amazon introduced a new version of its popular Kindle for iPad app, which is the #5 free iPad app of all time and the #1 free books app on iPad. Millions of customers are using the new Kindle for iPad app, which is optimized for the high resolution display of the newest iPad.
  • Amazon announced an In-App Purchasing service, making it easy for Amazon Appstore developers to offer digital content and subscriptions for purchase within apps and games that are available on millions of Kindle Fires and other Android devices. Amazon Appstore’s In-App Purchasing service is simple for developers to integrate and helps monetize their apps and games, while offering customers a seamless and secure 1-Click purchasing experience.
  • Amazon.com announced the launch of the Amazon Instant Video app for PlayStation 3 (PS3), making the PS3 system the first video game console system to offer Amazon Instant Video, and allowing PS3 users to stream Prime Instant Videos and rent or buy the latest movies and TV episodes directly from their PS3. Customers can also access Amazon Instant Video and Prime Instant Video from Kindle Fire, Mac or PC, or on a TV using either a compatible connected device such as a Blu-ray player or a Roku or directly on compatible Smart TVs.
  • Amazon continued to expand its catalog of title offerings for Prime Instant Video, announcing licensing agreements with Discovery Communications and Viacom. Among the programs added are Discovery Channel’s Dirty Jobs, TLC’s Say Yes To The Dress and Animal Planet’s Whale Wars, as well as thousands of TV episodes from MTV, Comedy Central, Nickelodeon, TV Land, Spike, VH1, BET, CMT and Logo. These deals bring the total number of Prime Instant Videos to more than 17,000 movies and TV episodes from partners such as CBS, Fox, NBCUniversal, Sony, Warner Bros., PBS, Disney-ABC and many more.
  • North America segment sales, representing the Company’s U.S. and Canadian sites, were $7.43 billion, up 36% from first quarter 2011.
  • International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese, Italian and Spanish sites, were $5.76 billion, up 31% from first quarter 2011. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 32%.
  • Worldwide Media sales grew 19% to $4.71 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 19%.
  • Worldwide Electronics and Other General Merchandise sales grew 43% to $7.97 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 43%.
  • Amazon Web Services (AWS) announced that Amazon DynamoDB – the fastest growing AWS service ever – is now available in both the EU (Ireland) and Asia Pacific (Tokyo) Regions. Amazon DynamoDB is a fully managed NoSQL database service that provides extremely fast and predictable performance with seamless scalability.
  • AWS lowered prices for the 19th time in five years by reducing reserved instance prices for Amazon EC2 and Amazon RDS, as well as reducing on-demand pricing for Amazon EC2, Amazon RDS, and Amazon ElastiCache.
  • AWS launched AWS Marketplace, an online store that makes it easy for customers to find, compare, and immediately start using the software and services they need to build software systems and products, and run their businesses. With AWS Marketplace, software and SaaS providers with offerings that run in the AWS Cloud can benefit from increased awareness, simplified deployment, and automated billing. AWS Marketplace brings the same simple, trusted, and secure online shopping experience that customers enjoy on Amazon.com to software built for the AWS platform, streamlining the process of doing research and purchasing software.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of April 26, 2012, and exclude financial results of the Kiva Systems, Inc. acquisition which we expect to close in second quarter 2012. 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.

Second Quarter 2012 Guidance

  • Net sales are expected to be between $11.9 billion and $13.3 billion, or to grow between 20% and 34% compared with second quarter 2011.
  • Operating income (loss) is expected to be between $(260) million and $40 million, or between 229% decline and 80% decline compared with second quarter 2011.
  • This guidance includes approximately $260 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 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.

About Amazon.com

Amazon.com, Inc. (NASDAQ:AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth’s Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Electronics & Computers; Home & Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health & Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web Services provides Amazon’s developer customers with access to in-the-cloud infrastructure services based on Amazon’s own back-end technology platform, which developers can use to enable virtually any type of business. The new latest generation Kindle is the lightest, most compact Kindle ever and features the same 6-inch, most advanced electronic ink display that reads like real paper even in bright sunlight. Kindle Touch is a new addition to the Kindle family with an easy-to-use touch screen that makes it easier than ever to turn pages, search, shop, and take notes – still with all the benefits of the most advanced electronic ink display. Kindle Touch 3G is the top of the line e-reader and offers the same new design and features of Kindle Touch, with the unparalleled added convenience of free 3G. Kindle Fire is the Kindle for movies, TV episodes, music, books, magazines, apps, games and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, Amazon Silk (Amazon’s new revolutionary cloud-accelerated web browser), vibrant color touch screen, and powerful dual-core processor.

Amazon and its affiliates operate websites, including www.amazon.comwww.amazon.co.ukwww.amazon.dewww.amazon.co.jpwww.amazon.frwww.amazon.cawww.amazon.cn,www.amazon.it, and www.amazon.es. As used herein, “Amazon.com,” “we,” “our” and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.

AMAZON.COM, INC.
Consolidated Statements of Cash Flows
(in millions)
(unaudited)
Three Months Ended Twelve Months Ended
March 31, March 31,
2012 2011 2012 2011
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 5,269 $ 3,777 $ 2,641 $ 1,844
OPERATING ACTIVITIES:
Net income 130 201 561 1,054
Adjustments to reconcile net income to net cash from operating activities:
Depreciation of fixed assets, including internal-use software and website development, and other amortization 457 202 1,338 652
Stock-based compensation 160 110 605 448
Other operating expense (income), net 46 33 168 112
Losses (gains) on sales of marketable securities, net (2 ) 2 (8 ) 1
Other expense (income), net 15 37 (78 ) (36 )
Deferred income taxes (38 ) 15 83 38
Excess tax benefits from stock-based compensation (40 ) (46 ) (56 ) (219 )
Changes in operating assets and liabilities:
Inventories 747 343 (1,374 ) (997 )
Accounts receivable, net and other 746 359 (479 ) (170 )
Accounts payable (4,258 ) (2,649 ) 1,388 1,641
Accrued expenses and other (529 ) (183 ) 721 697
Additions to unearned revenue 397 210 1,252 709
Amortization of previously unearned revenue (269 ) (220 ) (1,070 ) (897 )
Net cash provided by (used in) operating activities (2,438 ) (1,586 ) 3,051 3,033
INVESTING ACTIVITIES:
Purchases of fixed assets, including internal-use software and website development (386 ) (298 ) (1,899 ) (1,138 )
Acquisitions, net of cash acquired, and other (50 ) (139 ) (615 ) (473 )
Sales and maturities of marketable securities and other investments 1,738 1,939 6,641 5,318
Purchases of marketable securities and other investments (852 ) (1,112 ) (5,997 ) (6,135 )
Net cash provided by (used in) investing activities 450 390 (1,870 ) (2,428 )
FINANCING ACTIVITIES:
Excess tax benefits from stock-based compensation 40 46 56 219
Common stock repurchased (960 ) - (1,237 ) -
Proceeds from long-term debt and other 68 89 154 168
Repayments of long-term debt, capital lease, and finance lease obligations (153 ) (111 ) (483 ) (295 )
Net cash provided by (used in) financing activities (1,005 ) 24 (1,510 ) 92
Foreign-currency effect on cash and cash equivalents 12 36 (24 ) 100
Net increase (decrease) in cash and cash equivalents (2,981 ) (1,136 ) (353 ) 797
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,288 $ 2,641 $ 2,288 $ 2,641
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long term debt $ 6 $ 3 $ 17 $ 12
Cash paid for income taxes (net of refunds) 19 7 45 79
Fixed assets acquired under capital leases 149 181 721 526
Fixed assets acquired under build-to-suit leases 17 69 207 182
AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
Three Months Ended
March 31,
2012 2011
Net product sales (1) $ 11,249 $ 8,698
Net services sales (2) 1,936 1,159
Net sales 13,185 9,857
Operating expenses (3):
Cost of sales 10,027 7,608
Fulfillment 1,295 855
Marketing 480 327
Technology and content 945 579
General and administrative 200 133
Other operating expense (income), net 46 33
Total operating expenses 12,993 9,535
Income from operations 192 322
Interest income 12 15
Interest expense (21 ) (12 )
Other income (expense), net (99 ) (18 )
Total non-operating income (expense) (108 ) (15 )
Income before income taxes 84 307
Provision for income taxes (43 ) (89 )
Equity-method investment activity, net of tax 89 (17 )
Net income $ 130 $ 201
Basic earnings per share $ 0.29 $ 0.44
Diluted earnings per share $ 0.28 $ 0.44
Weighted average shares used in computation of earnings per share:
Basic 453 451
Diluted 460 459
(1) Represents revenue from the sale of products and related shipping fees and digital content where we are the seller of record.
(2) Represents third-party seller fees earned (including commissions) and related shipping fees, digital content subscriptions, and non-retail activities.
(3) Includes stock-based compensation as follows:
Fulfillment $ 37 $ 24
Marketing 12 7
Technology and content 85 61
General and administrative 26 18
AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(unaudited)
Three Months Ended
March 31,
2012 2011
Net income $ 130 $ 201
Other comprehensive income:
Foreign currency translation adjustments, net of tax of $(38) and $(7) 137 135
Change in unrealized gains on available-for-sale securities, net of tax of $(2) and $(5) 5 (11 )
Total other comprehensive income 142 124
Comprehensive income $ 272 $ 325
AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
Three Months Ended
March 31,
2012 2011
North America
Net sales $ 7,427 $ 5,465
Segment operating expenses (1) 7,078 5,175
Segment operating income $ 349 $ 290
International
Net sales $ 5,758 $ 4,392
Segment operating expenses (1) 5,709 4,217
Segment operating income $ 49 $ 175
Consolidated
Net sales $ 13,185 $ 9,857
Segment operating expenses (1) 12,787 9,392
Segment operating income 398 465
Stock-based compensation (160 ) (110 )
Other operating income (expense), net (46 ) (33 )
Income from operations 192 322
Total non-operating income (expense) (108 ) (15 )
Provision for income taxes (43 ) (89 )
Equity-method investment activity, net of tax 89 (17 )
Net income $ 130 $ 201
Segment Highlights:
Y/Y net sales growth:
North America 36 % 45 %
International 31 31
Consolidated 34 38
Y/Y segment operating income growth (decline):
North America 20 % 6 %
International (72 ) (25 )
Consolidated (15 ) (8 )
Net sales mix:
North America 56 % 55 %
International 44 45
100 % 100 %
(1) Represents operating expenses, excluding stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments.
AMAZON.COM, INC.
Supplemental Net Sales Information
(in millions)
(unaudited)
Three Months Ended
March 31,
2012 2011
North America
Media $ 2,197 $ 1,885
Electronics and other general merchandise 4,772 3,303
Other (1) 458 277
Total North America $ 7,427 $ 5,465
International
Media $ 2,513 $ 2,073
Electronics and other general merchandise 3,203 2,285
Other (1) 42 34
Total International $ 5,758 $ 4,392
Consolidated
Media $ 4,710 $ 3,958
Electronics and other general merchandise 7,975 5,588
Other (1) 500 311
Total Consolidated $ 13,185 $ 9,857
Y/Y Net Sales Growth:
North America:
Media 17 % 18 %
Electronics and other general merchandise 44 63
Other 66 74
Total North America 36 45
International:
Media 21 % 13 %
Electronics and other general merchandise 40 54
Other 24 15
Total International 31 31
Consolidated:
Media 19 % 15 %
Electronics and other general merchandise 43 59
Other 61 65
Total Consolidated 34 38
Y/Y Net Sales Growth Excluding Effect of Exchange Rates:
International:
Media 22 % 9 %
Electronics and other general merchandise 42 49
Other 26 12
Total International 32 27
Consolidated:
Media 19 % 13 %
Electronics and other general merchandise 43 57
Other 61 64
Total Consolidated 34 36
Consolidated Net Sales Mix:
Media 36 % 40 %
Electronics and other general merchandise 60 57
Other 4 3
100 % 100 %
(1) Includes non-retail activities, such as AWS, miscellaneous marketing and promotional activities, co-branded credit card agreements, and other seller sites.
AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
March 31, December 31,
2012 2011
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 2,288 $ 5,269
Marketable securities 3,427 4,307
Inventories 4,255 4,992
Accounts receivable, net and other 1,813 2,571
Deferred tax assets 371 351
Total current assets 12,154 17,490
Fixed assets, net 4,653 4,417
Deferred tax assets 27 28
Goodwill 1,970 1,955
Other assets 1,535 1,388
Total assets $ 20,339 $ 25,278
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 6,886 $ 11,145
Accrued expenses and other 3,602 3,751
Total current liabilities 10,488 14,896
Long-term liabilities 2,580 2,625
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value:
Authorized shares — 500
Issued and outstanding shares — none - -
Common stock, $0.01 par value:
Authorized shares — 5,000
Issued shares — 474 and 473
Outstanding shares — 450 and 455 5 5
Treasury stock, at cost (1,837 ) (877 )
Additional paid-in capital 7,192 6,990
Accumulated other comprehensive loss (174 ) (316 )
Retained earnings 2,085 1,955
Total stockholders’ equity 7,271 7,757
Total liabilities and stockholders’ equity $ 20,339 $ 25,278
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
Y/Y %
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Change
Cash Flows and Shares
Operating cash flow — trailing twelve months (TTM) $ 3,033 $ 3,205 $ 3,114 $ 3,903 $ 3,051 1 %
Purchases of fixed assets (incl. internal-use software & website development) — TTM $ 1,138 $ 1,374 $ 1,589 $ 1,811 $ 1,899 67 %
Free cash flow (operating cash flow less purchases of fixed assets) — TTM $ 1,895 $ 1,831 $ 1,525 $ 2,092 $ 1,152 (39 %)
Free cash flow — TTM Y/Y growth (18 %) (8 %) (17 %) (17 %) (39 %) N/A
Invested capital (1) $ 7,931 $ 8,551 $ 9,147 $ 9,680 $ 10,006 N/A
Return on invested capital (2) 24 % 21 % 17 % 22 % 12 % N/A
Common shares and stock-based awards outstanding 466 468 469 468 464 -
Common shares outstanding 452 454 455 455 450 -
Stock-based awards outstanding 14 15 14 14 13 (4 %)
Stock-based awards outstanding — % of common shares outstanding 3.1 % 3.2 % 3.2 % 3.0 % 2.9 % N/A
Results of Operations
Worldwide (WW) net sales $ 9,857 $ 9,913 $ 10,876 $ 17,431 $ 13,185 34 %
WW net sales — Y/Y growth, excluding F/X 36 % 44 % 39 % 34 % 34 % N/A
WW net sales — TTM $ 36,931 $ 40,278 $ 43,594 $ 48,077 $ 51,404 39 %
WW net sales — TTM Y/Y growth, excluding F/X 39 % 39 % 39 % 37 % 37 % N/A
Operating income $ 322 $ 201 $ 79 $ 260 $ 192 (40 %)
Operating income — Y/Y growth, excluding F/X (20 %) (36 %) (77 %) (48 %) (38 %) N/A
Operating margin — % of WW net sales 3.3 % 2.0 % 0.7 % 1.5 % 1.5 % N/A
Operating income — TTM $ 1,334 $ 1,265 $ 1,076 $ 862 $ 732 (45 %)
Operating income — TTM Y/Y growth, excluding F/X 7 % (7 %) (25 %) (44 %) (50 %) N/A
Operating margin — TTM % of WW net sales 3.6 % 3.1 % 2.5 % 1.8 % 1.4 % N/A
Net income $ 201 $ 191 $ 63 $ 177 $ 130 (35 %)
Net income per diluted share $ 0.44 $ 0.41 $ 0.14 $ 0.38 $ 0.28 (35 %)
Net income — TTM $ 1,054 $ 1,038 $ 871 $ 631 $ 561 (47 %)
Net income per diluted share — TTM $ 2.30 $ 2.26 $ 1.89 $ 1.37 $ 1.22 (47 %)
Segments
North America Segment:
Net sales $ 5,465 $ 5,406 $ 5,932 $ 9,902 $ 7,427 36 %
Net sales — Y/Y growth, excluding F/X 45 % 50 % 44 % 37 % 36 % N/A
Net sales — TTM $ 20,392 $ 22,208 $ 24,014 $ 26,705 $ 28,667 41 %
Operating income $ 290 $ 214 $ 144 $ 285 $ 349 20 %
Operating margin — % of North America net sales 5.3 % 4.0 % 2.4 % 2.9 % 4.7 % N/A
Operating income — TTM $ 972 $ 986 $ 943 $ 933 $ 991 2 %
Operating income — TTM Y/Y growth, excluding F/X 17 % 9 % 1 % (2 %) 2 % N/A
Operating margin — TTM % of North America net sales 4.8 % 4.4 % 3.9 % 3.5 % 3.5 % N/A
International Segment:
Net sales $ 4,392 $ 4,507 $ 4,944 $ 7,529 $ 5,758 31 %
Net sales — Y/Y growth, excluding F/X 27 % 36 % 33 % 29 % 32 % N/A
Net sales — TTM $ 16,539 $ 18,070 $ 19,580 $ 21,372 $ 22,737 37 %
Net sales — TTM % of WW net sales 45 % 45 % 45 % 44 % 44 % N/A
Operating income $ 175 $ 172 $ 116 $ 177 $ 49 (72 %)
Operating margin — % of International net sales 4.0 % 3.8 % 2.4 % 2.4 % 0.9 % N/A
Operating income — TTM $ 922 $ 888 $ 790 $ 640 $ 515 (44 %)
Operating income — TTM Y/Y growth, excluding F/X 4 % (7 %) (23 %) (41 %) (49 %) N/A
Operating margin — TTM % of International net sales 5.6 % 4.9 % 4.0 % 3.0 % 2.3 % N/A
Consolidated Segments:
Operating expenses (3) $ 9,392 $ 9,527 $ 10,616 $ 16,969 $ 12,787 36 %
Operating expenses — TTM (3) $ 35,037 $ 38,404 $ 41,860 $ 46,504 $ 49,899 42 %
Operating income $ 465 $ 386 $ 260 $ 462 $ 398 (15 %)
Operating margin — % of Consolidated sales 4.7 % 3.9 % 2.4 % 2.7 % 3.0 % N/A
Operating income — TTM $ 1,894 $ 1,874 $ 1,734 $ 1,573 $ 1,505 (21 %)
Operating income — TTM Y/Y growth, excluding F/X 10 % 1 % (11 %) (21 %) (22 %) N/A
Operating margin — TTM % of Consolidated net sales 5.1 % 4.7 % 4.0 % 3.3 % 2.9 % N/A
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except inventory turnover, accounts payable days and employee data)
(unaudited)
Y/Y %
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Change
Supplemental
Supplemental North America Segment Net Sales:
Media $ 1,885 $ 1,585 $ 1,927 $ 2,562 $ 2,197 17 %
Media — Y/Y growth, excluding F/X 18 % 19 % 21 % 8 % 17 % N/A
Media — TTM $ 7,170 $ 7,430 $ 7,767 $ 7,959 $ 8,270 15 %
Electronics and other general merchandise $ 3,303 $ 3,496 $ 3,635 $ 6,881 $ 4,772 44 %
Electronics and other general merchandise — Y/Y growth, excluding F/X 63 % 67 % 56 % 51 % 44 % N/A
Electronics and other general merchandise — TTM $ 12,277 $ 13,683 $ 14,992 $ 17,315 $ 18,784 53 %
Electronics and other general merchandise — TTM % of North America net sales 60 % 62 % 62 % 65 % 66 % N/A
Other $ 277 $ 325 $ 370 $ 459 $ 458 66 %
Other — TTM $ 945 $ 1,095 $ 1,255 $ 1,431 $ 1,613 71 %
Supplemental International Segment Net Sales:
Media $ 2,073 $ 2,075 $ 2,226 $ 3,447 $ 2,513 21 %
Media — Y/Y growth, excluding F/X 9 % 20 % 17 % 18 % 22 % N/A
Media — TTM $ 8,247 $ 8,772 $ 9,238 $ 9,820 $ 10,261 24 %
Electronics and other general merchandise $ 2,285 $ 2,398 $ 2,681 $ 4,032 $ 3,203 40 %
Electronics and other general merchandise — Y/Y growth, excluding F/X 49 % 53 % 51 % 41 % 42 % N/A
Electronics and other general merchandise — TTM $ 8,162 $ 9,162 $ 10,199 $ 11,397 $ 12,314 51 %
Electronics and other general merchandise — TTM % of International net sales 49 % 51 % 52 % 53 % 54 % N/A
Other $ 34 $ 34 $ 37 $ 50 $ 42 24 %
Other — TTM $ 130 $ 136 $ 143 $ 155 $ 162 26 %
Supplemental Worldwide Net Sales:
Media $ 3,958 $ 3,660 $ 4,153 $ 6,009 $ 4,710 19 %
Media — Y/Y growth, excluding F/X 13 % 20 % 19 % 14 % 19 % N/A
Media — TTM $ 15,417 $ 16,202 $ 17,005 $ 17,779 $ 18,531 20 %
Electronics and other general merchandise $ 5,588 $ 5,894 $ 6,316 $ 10,913 $ 7,975 43 %
Electronics and other general merchandise — Y/Y growth, excluding F/X 57 % 62 % 54 % 47 % 43 % N/A
Electronics and other general merchandise — TTM $ 20,439 $ 22,845 $ 25,191 $ 28,712 $ 31,098 52 %
Electronics and other general merchandise — TTM % of WW net sales 55 % 57 % 58 % 60 % 60 % N/A
Other $ 311 $ 359 $ 407 $ 509 $ 500 61 %
Other — TTM $ 1,075 $ 1,231 $ 1,398 $ 1,586 $ 1,775 65 %
Balance Sheet
Cash and marketable securities $ 6,881 $ 6,355 $ 6,326 $ 9,576 $ 5,715 (17 %)
Inventory, net — ending $ 2,888 $ 3,229 $ 3,770 $ 4,992 $ 4,255 47 %
Inventory turnover, average — TTM 11.6 11.3 10.8 10.3 10.4 (10 %)
Fixed assets, net $ 2,902 $ 3,470 $ 3,999 $ 4,417 $ 4,653 60 %
Accounts payable — ending $ 5,540 $ 5,721 $ 6,552 $ 11,145 $ 6,886 24 %
Accounts payable days — ending 66 69 72 74 62 (5 %)
Other
WW shipping revenue $ 330 $ 331 $ 360 $ 531 $ 461 40 %
WW shipping costs $ 786 $ 820 $ 918 $ 1,466 $ 1,129 44 %
WW net shipping costs $ 456 $ 489 $ 558 $ 935 $ 668 47 %
WW net shipping costs — % of WW net sales 4.6 % 4.9 % 5.1 % 5.4 % 5.1 % N/A
Employees (full-time and part-time; excludes contractors & temporary personnel) 37,900 43,200 51,300 56,200 65,600 73 %
(1) Average Total Assets minus Current Liabilities (excluding current portion of Long Term Debt) over five quarter ends.
(2) TTM Free Cash Flow divided by Invested Capital.
(3) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.

Amazon.com, Inc.

Certain Definitions

Customer Accounts

  • References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Enterprise Solutions program customers, Amazon.com Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

Seller Accounts

  • References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Seller accounts exclude Amazon Enterprise Solutions sellers. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

Registered Developers

  • References to registered developers mean cumulative registered developer accounts, which are established when potential developers enroll with Amazon Web Services and receive a developer access key.

Units

  • References to units mean physical and digital units sold (net of returns and cancellations) by us and sellers at Amazon domains worldwide – for example as well as Amazon-owned items sold through non-Amazon domains. Units sold are paid units and do not include units associated with certain acquisitions, rental businesses, web services or advertising businesses, or Amazon gift certificates.

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Amazon’s Q1 2012 earnings: net income down 35 percent to $130 million, net sales at $13.18 billion

Thursday, April 26th, 2012

amazon money

It’s no Apple-sized quarter, but you’d need to be on HGTV’s Million Dollar Rooms a handful of times over to scoff at Amazon’s Q1 2012 earnings. Or, you know, Wall Street. After reporting $177 million in net earnings last quarter (on $17.43 billion in revenue), the online sales behemoth has today registered $13.18 billion in net sales — proudly reporting that said tally was up from the $9.86 billion in its Q1 a year ago. Excluding the $56 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 34 percent compared with first quarter 2011. As for operating income? That checked in at $192 million (compared to $322 million Q1 2011), with the outfit noting that the “unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $4 million.” Net income also sank 35 percent from $201 million a year ago, but it still left Amazon with $130 million more in the bank than it had just three months ago.

Developing…

Amazon’s Q1 2012 earnings: net income down 35 percent to $130 million, net sales at $13.18 billion originally appeared on Engadget on Thu, 26 Apr 2012 16:36:00 EDT. Please see our terms for use of feeds.

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LG’s Q1 2012 earnings show greater profits on strong TV, phone sales

Tuesday, April 24th, 2012

Image

LG has released its Q1 2012 numbers, and there’s plenty of good news to go around, with TV profits that nearly doubled and profit from cellphones for the second quarter in a row following six straight quarters of losses. Despite slightly lower sales, more of the units that did sell had higher prices and made more profit. In its press release, the company claimed to have “turned the corner” with a net profit of $215 million, blaming the slower sales of TVs on the European economy and cellphones on declining featurephone sales. We don’t have specific numbers, but it called out the popularity of the Optimus LTE and Optimus Vu as part of the reason for increased revenues. Of course, the year is only just getting under way, and the company is expected to introduce its first 55-inch OLED HDTV soon, as well as quad-core smartphones and a new L-style series of phones. Before that however, it will have to deal with the competition from fellow Korean giant Samsung which will report its earnings later this week and has a few high profile releases up its sleeves as well. There’s more details in the press release after the break, and PDF linked below.

Continue reading LG’s Q1 2012 earnings show greater profits on strong TV, phone sales

LG’s Q1 2012 earnings show greater profits on strong TV, phone sales originally appeared on Engadget on Wed, 25 Apr 2012 01:11:00 EDT. Please see our terms for use of feeds.

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Verizon plans big Windows Phone push for the holidays

Friday, April 20th, 2012

Verizon Wireless chief financial officer Fran Shammo said the company is looking to market a third mobile platform to help develop a strong competitor to Apple and Google. That operating system will be Microsoft’s upcoming Windows Phone 8. “We’re really looking at the Windows Phone 8.0 platform because that’s a differentiator. We’re working with Microsoft on it,” Shammo said in an interview with Reuters following the company’s earnings call on Thursday. The carrier expects to have Windows Phone 8-powered handsets in time for the 2012 holiday shopping season. The executive suggested that Verizon could play a similar role in helping Microsoft’s platform to grow as it did with Google’s Android OS.

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Larry Page: Android is important, but not critical to Google

Wednesday, April 18th, 2012

According to Google CEO and co-founder Larry Page, the Android mobile operating system is an important asset for Google, but it is not critical. Page made the claim during courtroom testimony as he took the stand for a second day in the company’s legal dispute with Oracle. The CEO’s testimony is rather puzzling — Page has previously claimed the company’s Android platform was “on fire” and a “tremendous example of the power of partnership” that “gets better with each version.” During an earnings call in October, Page said the company was “seeing a huge positive revenue impact from mobile, which has grown 2.5 times in the last 12 months to a run rate of over $2.5 billion.” Furthermore, Google’s $12.5 billion acquisition of Motorola Mobility was meant to protect Android and further its mobile dominance according to statements the CEO made when the deal was announced.

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HTC sees sharp decline in Q1 revenue, profit

Friday, April 6th, 2012

HTC on Friday reported unaudited earnings for the first quarter, revealing an extremely rocky start to the new year. The company warned that its first quarter results would see decline as the Taiwan-based vendor prepared to launch its new flagship smartphones, and preliminary numbers are in line with HTC’s earlier forecast. Revenue of NT$67.8 billion in the first quarter is down 35% from the same period last year, and HTC posted an after-tax profit of just NT$4.7 billion, down 70% year-on-year. HTC hopes business will pick up significantly as its new flagship smartphones, the One X and One S, begin to launch in various regions abroad. In the United States, the One X will launch on AT&T this month and before the end of June on Sprint as the HTC EVO 4G LTE. The HTC One S will be released in April on T-Mobile.

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Apple’s ‘iPad mini’ may be even more mini than you thought

Tuesday, March 6th, 2012

A new report suggests Apple’s upcoming “iPad mini” will be even smaller than earlier rumors suggested. Venturebeat is one of a number of sites that recently reported Apple’s upcoming next-generation iPad will be named “iPad HD.” The pixel-count certainly justifies the moniker — Apple’s new tablet will supposedly feature a high-definition 2,048 x 1,536-pixel display — and the rumors started with a leaked parts list that surfaced last week. The site also claims that Apple’s often rumored iPad mini, which is expected to launch some time in the second half this year, will feature a 7.1-inch display rather than a 7.85-inch display as we’ve heard numerous times in the past. Read on for more.

A 7.1-inch display would pit Apple’s tiny tablet against the likes of Amazon’s Kindle Fire and Barnes & Noble’s Nook Tablet, and it would also be exactly the size Apple co-founder Steve Jobs said Apple would never touch.

“One naturally thinks that a 7-inch screen would offer 70 percent of the benefits of a 10-inch screen,” Jobs said in 2010 on an earnings call. “Unfortunately, this is far from the truth. The reason we won’t make a 7-inch tablet isn’t because we don’t want to hit a lower price point, it’s because we think the screen is too small to express the software.”

This wouldn’t be the first time Apple launched a device with features it had previously criticized, however. There are numerous examples of Apple backtracking over the years, but the most famous is perhaps Apple’s insistance that the iPhone didn’t need to support third-party apps and that web apps were the answer. Fast-forward to March 2012, and Apple just announced that its App Store has now served more than 25 billion downloads.

Apple’s “iPad mini” will reportedly launch in the third quarter ahead of Apple’s next-generation iPhone, which is expected to launch this fall.

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TiVo releases Q4 results, announces transcoder and IP set-top box on the way

Thursday, February 23rd, 2012

Today TiVo announced its earnings for Q4 2011 and the full year, however the most interesting note was word of a few new boxes on the way. From the sound of things, the company will deliver a four stream transcoder similar to the one we saw demonstrated at CES (pictured above) capable of dishing out video to multiple devices (phones, tablets, etc.) within the home simultaneously. Also on the way is an IP set-top box coming to retail that sounds very much like the TiVo Preview multiroom extender, however it could include access to internet video services as well. As mentioned on Tech of the Hub, CEO Tom Rogers’ statements indicate the transcoder will enable both live streaming and DirecTV Nomad-style “high speed” sideloading of recorded content for offline viewing. More concrete are its positive numbers from the partnership with Virgin Media in the UK, and progress on a plan for Pace to develop TiVo-compatible set-top boxes for cable operators here and abroad. The Comcast partnership is also apparently progressing, with VOD access in beta trials and preparing to launch “soon” in the San Francisco area.

Continue reading TiVo releases Q4 results, announces transcoder and IP set-top box on the way

TiVo releases Q4 results, announces transcoder and IP set-top box on the way originally appeared on Engadget on Thu, 23 Feb 2012 18:28:00 EDT. Please see our terms for use of feeds.

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A single share of Apple stock now costs more than an iPad

Monday, February 13th, 2012

The “Apple is worth more than” meme has gotten plenty of play over the past year, but a new measure of Apple’s success emerged on Monday that is as simple as it is monumental: a single share of Apple stock now costs more than an iPad. As of the open of the market on Monday, Apple’s stock rose just above $499 — the entry-level price of Apple’s iPad 2 — undoubtedly on its way to $500 and beyond. The Cupertino-based firm that once teetered on the brink of bankruptcy and was saved in part by a $150 million investment from Microsoft is now worth more than Microsoft and Google combined. Read on for more.

Apple shares exploded last month after the company reported earnings for its first fiscal quarter. The firm’s $13.06 billion in profit was the most ever recorded in a single quarter by a technology company, and the second most ever recorded by any company in the United States.

Apple now has more than $100 billion in cash — the company reported that the total value of its cash and marketable securities reached $97.6 billion at the end of the first fiscal quarter — and it is about to unveil a brand new version of its popular iPad tablet, the Retina Display-equipped iPad 3. Apple is then expected to enter brand new territory for the firm when it launches the “iTV” this summer, and a completely redesigned iPhone will likely follow this fall.

No company stays on top forever, but things aren’t expected to slow down any time soon for Apple. In fact, those sky-high price targets some scoffed at last year really aren’t looking so outlandish anymore. OK, maybe a few of them still are.

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Seagate expects flood-related hard drive shortages to continue

Thursday, February 2nd, 2012

Seagate took some time out from its busy earnings reporting schedule to address supply concerns stemming from the recent devastating floods in Thailand. The storage manufacturer announced that hard drives supply will likely fall 150 million units short of demand by year’s end. While Seagate’s own factories weren’t directly hit, suppliers for the company were impacted — as were competitors, like Western Digital. The events have also had a more positive impact on Seagate, however — as a result of the floods, a number of large buyers have entered into long-term agreements, according to the company.

Seagate expects flood-related hard drive shortages to continue originally appeared on Engadget on Thu, 02 Feb 2012 09:11:00 EDT. Please see our terms for use of feeds.

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Sky will launch an internet based TV service in the UK in the first half of 2012

Tuesday, January 31st, 2012

UK pay TV service Sky has just announced its quarterly results, and despite adding 100,000 subscribers as well as notching its “highest ever first-half adjusted operating profit” it will launch a new internet TV service, available to anyone in the country with a broadband connection. Check out the press release after the break for a few more details. Sky describes the new service as being aimed at the 13 million UK households who don’t currently subscribe to pay TV, with access available via “PC, laptop, tablet, smartphone, games console or connected TV.”

…developing

Continue reading Sky will launch an internet based TV service in the UK in the first half of 2012

Sky will launch an internet based TV service in the UK in the first half of 2012 originally appeared on Engadget on Tue, 31 Jan 2012 03:05:00 EDT. Please see our terms for use of feeds.

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Motorola posts $80 million Q4 loss; ships 10.5 million mobile devices including 200,000 tablets

Thursday, January 26th, 2012

Motorola Mobility on Thursday announced the company’s results for the fourth quarter last year. The vendor managed $3.4 billion in revenue but posted a net loss of $80 million, or $0.27 per share. Motorola posted a profit of $0.27 per share in the same quarter a year earlier. For the full year, the company’s revenue totaled $13.1 billion, up 14% compared to 2010, and it reported a net loss was $0.84 per share compared to a loss of $0.29 per share in 2010. Motorola shipped 10.5 million mobile devices in the fourth quarter, including 200,000 tablets, and full-year device shipments totaled 42.4 million units. Motorola Mobility’s full press release follows below.

Motorola Mobility Announces Fourth Quarter and Full-Year Financial Results

LIBERTYVILLE, Ill., Jan. 26, 2012 /PRNewswire/ –

Fourth Quarter Financial Highlights

  • Net revenues of $3.4 billion
  • Non-GAAP net earnings of $0.20 per share compared to net earnings of $0.37 per share in fourth quarter 2010; GAAP net loss of $0.27 per share compared to net earnings of$0.27 per share in fourth quarter 2010
  • Mobile Devices net revenues of $2.5 billion, up 5 percent from fourth quarter 2010; Non-GAAP operating loss of $19 million; GAAP operating loss of $70 million
  • Shipped 10.5 million mobile devices, including 5.3 million smartphones
  • Home net revenues of $897 million, down 11 percent from fourth quarter 2010; Non-GAAP operating earnings of $84 million; GAAP operating earnings of $57 million

Motorola Mobility Holdings, Inc. (NYSE: MMI) today reported net revenues of $3.4 billion in the fourth quarter of 2011, comparable to the fourth quarter of 2010. The GAAP net loss in the fourth quarter of 2011 was $80 million, or $0.27 per share, compared to net earnings of $80 million, or $0.27 per share, in the fourth quarter of 2010. On a non-GAAP basis, net earnings in the fourth quarter 2011 were $61 million, or $0.20 per share, compared to net earnings of $108 million, or $0.37 per share, in the fourth quarter of 2010.

For the full year, 2011 net revenues were $13.1 billion, up 14 percent compared to 2010. For the full year, the GAAP net loss was $0.84 per share compared to a loss of $0.29 per share in 2010. On a non-GAAP basis, net earnings were $0.33 per share compared to a loss of $0.28 per share in 2010.

The Company generated positive operating cash flow of $225 million and $357 million in the fourth quarter and full year, respectively. Total cash at the end of the quarter was $3.6 billion and includes cash, cash equivalents, and cash deposits.

Details on non-GAAP adjustments and the use of non-GAAP measures are included later in this press release and in the financial tables.

“In the fourth quarter, we received very positive consumer response to Motorola RAZR, which combined an iconic brand with ultra-thin in an innovative smartphone.  Our Home business continues to be a leader in the industry’s transformation to all IP, with unique solutions that enable rich media experiences across any screen,” said Sanjay Jha, chairman and chief executive officer, Motorola Mobility. “We remain energized by the proposed merger with Google and continue to focus on creating innovative technologies.”

Operating Results

Mobile Devices net revenues in the fourth quarter, impacted by the increased competitive environment, were $2.5 billion, up 5 percent compared with the year-ago quarter. The GAAP operating loss was $70 million compared to operating earnings of $72 million in the year-ago quarter. The non-GAAP operating loss was $19 million compared to operating earnings of $56 million in the year-ago quarter. For the full year 2011, net revenues were $9.5 billion, an increase of 22 percent compared to 2010. The 2011 GAAP operating loss was$285 million compared to an operating loss of $76 million in 2010. The 2011 non-GAAP operating loss was $126 million compared to an operating loss of $198 million in 2010.

The Company shipped a total of 10.5 million and 42.4 million mobile devices in the fourth quarter and full year 2011, respectively. This included 5.3 million and 18.7 million smartphones and approximately 200 thousand and 1 million tablets in the fourth quarter and full year, respectively.

Mobile Devices highlights:

  • Launched Motorola RAZR extending the iconic RAZR brand around the world
  • Announced DROID RAZR MAXX, featuring twice as much battery life as the leading competitor and measuring only 8.99 millimeters
  • Unveiled the award-winning DROID 4 by Motorola, the thinnest and most powerful 4G LTE QWERTY smartphone featuring a five-row keyboard and edge-lit keys
  • Introduced two new 4G LTE tablets, the DROID XYBOARD 10.1 and XYBOARD 8.2.
  • Announced the “life proof” Motorola DEFY MINI and slim MOTOLUXE, two new value priced additions to Motorola’s growing budget-friendly portfolio
  • Shipped award-winning MOTOACTV, the world’s first combined GPS fitness tracker and MP3 player
  • Launched two flagship devices in China – the TD-SCDMA Motorola MT917 and the Motorola XT928, a dual-core, dual-mode, dual-standby smartphone

Home segment net revenues in the fourth quarter were $897 million, down 11 percent compared with the year-ago quarter. GAAP operating earnings were $57 million, compared to$54 million in the year-ago quarter. Non-GAAP operating earnings were $84 million compared to $90 million in the year-ago quarter. Fourth quarter set-top shipments were down 3 percent compared to the year-ago quarter. For the full year 2011, net revenues were $3.5 billion, compared to $3.6 billion in 2010. GAAP operating earnings increased to $226 millionfrom $152 million in 2010. The 2011 non-GAAP operating earnings increased to $332 million from $272 million in 2010. Full year set-top shipments were up 6 percent compared to 2010.

Home highlights:

  • Launched DreamGallery next-generation HTML-5 video navigation software in North America with Shaw Communications
  • Expanded video leadership and paved the way for Canada’s move to all-MPEG-4 broadcast and On-Demand HD services with Eastlink
  • Demonstrated market leadership with introduction of new carrier Ethernet product line for the deployment of cost-effective commercial services
  • Introduced Motorola APEX3000, which delivers market-leading density to cost-effectively add greater demand for narrowcast services such as VOD and DVR
  • Selected by Altibox AS in Norway to provide VAP 2400 HD wireless video bridge to enable multi-room TV services

Merger Update

As previously announced on August 15, 2011, Motorola Mobility and Google Inc. (“Google”) (NASDAQ: GOOG) entered into a definitive agreement for Google to acquire Motorola Mobility for $40.00 per share in cash, or a total of approximately $12.5 billion.  On November 17, 2011, Motorola Mobility stockholders voted overwhelmingly to approve the proposed merger with Google at the Company’s Special Meeting of Stockholders.  The Company continues to work closely with Google to complete the proposed acquisition of Motorola Mobility as expeditiously as possible.

The Company notes that the transaction remains subject to various closing conditions. Antitrust clearances, or waiting period expirations, are required by the U.S. Department of Justice (DOJ), by the European Commission, and in Canada, China, Israel, Russia, Taiwan and Turkey. Requisite filings have been submitted to the appropriate regulatory body in each of these jurisdictions. Clearances have been received in Turkey and Russia. In Canada and the United States, the statutory waiting period for the transaction has expired although the parties have been informed that the reviewing agencies have not closed their respective investigations.  In December 2011, the Chinese Ministry of Commerce proceeded to phase two of its investigation.  In February, the European Commission is expected to announce whether it will close its investigation or proceed to a phase two investigation.

The Company currently expects the transaction to close in early 2012 once all conditions have been satisfied and reminds stockholders that it is possible that the failure to timely meet such conditions or other factors outside of the Company’s control could delay or prevent completion of the transaction altogether.

For more information on the proposed merger, please visit http://investors.motorola.com.

Conference Call and Webcast

In light of the pending acquisition of the Company by Google, the Company does not conduct a financial analyst conference call or webcast following the release of its earnings information nor provide financial guidance. To access the fourth quarter results and other financial information, please visit http://investors.motorola.com.

Consolidated GAAP Results

A comparison of results from operations is as follows:

Fourth Quarter Full Year
(In millions, except per share amounts) 2011 2010 2011 2010
Net revenues $3,436 $3,425 $13,064 $11,460
Gross margin 854 915 3,317 2,965
Operating earnings (loss) (78) 126 (142) 76
Earnings (loss) before income taxes (78) 110 (148) (4)
Net earnings (loss) attributable to Motorola Mobility Holdings, Inc. ($80) $80 ($249) ($86)
Basic earnings (loss) per common share * ($0.27) $0.27 ($0.84) ($0.29)
Diluted loss per common share* ($0.27) N/A ($0.84) N/A
Weighted average common shares outstanding
   Basic 300.2 294.3 297.1 294.3
   Diluted 300.2 N/A 297.1 N/A

Non-GAAP Adjustments for fourth quarter and full year 2011 and 2010

Fourth Quarter
Per Share Impact 2011 2010
GAAP Earnings (Loss) per Common Share * ($0.27) $0.27
Merger-related costs** 0.22 ——
Reorganization of business charges 0.09 0.06
Stock-based compensation expense 0.12 0.14
Intangible assets amortization expense 0.04 0.05
Joint venture wind-down costs —— 0.03
IP settlement —— (0.19)
Total Non-GAAP Adjustments *** 0.47 0.10
Non-GAAP Earnings per Common Share * $0.20 $0.37
Full Year
Per Share Impact 2011 2010
GAAP Loss per Common Share * ($0.84) ($0.29)
Merger-related costs** 0.28 ——
Reorganization of business charges 0.09 0.20
Stock-based compensation expense 0.52 0.55
Intangible assets amortization expense 0.20 0.19
Legal claim provision 0.07 ——
Joint venture wind-down costs —— 0.03
Legal settlement —— (0.77)
IP settlement —— (0.19)
Total Non-GAAP Adjustments *** 1.16 0.01
Non-GAAP Earnings (Loss) per Common Share * $0.33 ($0.28)

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Apple sells record 1.4 million Apple TVs in Q4; 85 million users now on iCloud

Wednesday, January 25th, 2012

During the company’s earnings call on Tuesday, Apple CEO Tim Cook revealed that Apple TV is “doing extremely well.” The Cupertino-based company sold a record 1.4 million units in the December quarter, though Cook says the product is still just a hobby. “We still classify this as a hobby, but we continue to add things to it,” he said. “I couldn’t live without it. We think it’s a fantastic product and we continue to pull strings and see where we can take it.” Cook also revealed that the company’s iCloud service now has 85 million users. “We’re thrilled with iCloud and the response from customers has been incredible,” he said. “It was a fundamental shift, recognizing that people had numerous devices and wanted their content in the cloud. 85 million customers in three months; It’s not a product, it’s a strategy for the next decade.”

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Analyst trims iPad sales projections, raises iPhone estimates

Thursday, December 1st, 2011

JP Morgan analyst Mark Moskowitz wrote in a research note Thursday morning that he is adjusting his quarterly sales estimates for both the iPhone and the iPad. Moskowitz expects Apple to sell 28 million iPhones during the fourth quarter, up from his original 25.3 million estimate. He cut his estimate for iPad sales, however, and now expects Apple to sell 13 million iPad units rather than his original 13.3 million-unit projection. Moskowitz also said he expects Apple to ship 5.4 million Mac computers during the quarter. “Our research inputs indicate that iPhone sales remain robust, and Mac sales holding up,” Moskowitz wrote. “The thrust of our call is that we are increasing iPhone estimates but slightly trimming our iPad estimates. Despite the uncertain macro environment, we expect Apple to sustain above-peer revenue growth, upward-trending margins, and incremental market penetration opportunities to fend off competitive and economic challenges.” Moskowitz increased his revenue forecast for the quarter from $37.36 billion to $38.69 billion with earnings of $9.87 per share, above the average Street estimate of $38.02 billion in revenue and $9.78 per share.

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Sprint says iPhone is 50% more network efficient than Android

Friday, October 28th, 2011

During the company’s earnings call on Wednesday, Sprint’s CEO Dan Hesse said the iPhone is more than 50% more efficient on Sprint’s network than Android devices. “iPhone users are expected to use significantly less 3G data than the typical user of a dual-mode 3G/4G device,” Hesse added, noting that his company has found that iPhone applications take better advantage of offloading data onto Wi-Fi networks and that Android apps are “more chatty” with its network. “If Sprint’s claims are true, this could become a new key differentiator in Apple’s relationship with the operators that subsidize its phones versus Apple’s competitors HTC, Samsung [and] Motorola,” BTIG Research analyst Walter Piecyk explained, noting that Sprint’s report is “short on evidence” and that his firm will continue to test those claims.

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