Sony reported quarterly revenues of $19.5 billion, down 6.5 percent in dollar terms from the same quarter last year, but flat if counted in yen. Profits rose to $290 million. Sony's videogames business sank 6.4 percent to $2.6 billion, but is expected to become more profitable as sales shift from money-losing consoles to videogame titles. [PaidContent]
Clearwire and new parent company Sprint Nextel certainly share one thing in common — operating losses. In an earnings announcement today, Clearwire posted a 76 percent increase in revenue compared to the same quarter last year for a total of $51.5 million. But while the company's stock tipped up slightly, it ultimately posted a loss of $1.08 per share, thirteen cents higher than analyst expectations. But with investment pouring in thanks to the deal with Sprint Nextel, these numbers may mean little. The real news? "With respect to our recent announcement to combine Clearwire and Sprint's mobile WiMAX businesses to form the new Clearwire, we expect the transaction to close during the fourth quarter of 2008," said Clearwire CEO Ben Wolff.(Photo by AP/Marco Garcia)
Fox Interactive Media, News Corp.'s Web division overseeing properties including MySpace, Photobucket and Rotten Tomatoes, saw its revenues drop in the second quarter to $210 million., from $233 million in the previous quarter. News Corp. president and COO told analysts today that the division would not meet its $1 billion revenue goal for its fiscal year, likely coming up $100 million short. He began the call: "Let me begining by saying yes, we will fall short of what were very aggressive projections." Insiders whisper that News Corp. CEO Rupert Murdoch set the numbers high to put pressure on MySpace CEO Chris DeWolfe. DeWolfe and MySpace friend-in-chief Tom Anderson signed a two-year, $30 million contract last fall to continue running the site.
Network equipment manufacturer Cisco reported a 10 percent increase in revenue to $9.8 billion, but a 5.4 percent drop in net income due to operating and acquisition costs. Trading volume spiked just before the closing bell, but the stock gained only a tenth of a point over yesterday's close. [WSJ] (Photo by AP/Michel Euler)
After computer maker Sun Microsystems admitted to a $34 million loss yesterday, investors could hardly wait to start the sell-off, with shares opening down and eventually closing at $12.64 — dipping as low as $12.37, well below half the the 52 week high and twenty percent in less than 24 hours. Prompting an unnamed reporter who covers Sun to let us steal the headline they'd never be allowed to run. While the company does promise to slash 2,500 employees from its payroll, the board may want to look at executive pay as well — CEO Jonathan Schwartz made Forbes' list of the twelve best-paid tech CEOs at $13.5 million.
Whispers on Wall Street predicted Time Warner would today report AOL ad revenues down 30 percent since last year, SAI reports. Didn't happen, but hold the cartwheels. AOL only grew 1 percent since the same quarter last year. Paid search and AOL's ad networks, which place ad on third-party sites, drove the growth, while declining revenue on display ads on AOL properties kept it meager. That's an unprofitable equation. Popular publishers demand high guarantees before joining ad networks. This quarter, such "traffic aquisition costs" were a primary reason for underwhelming numbers.
Myopic Wall Street often uses a microscope when it should use a telescope. The rot at Web publisher CNET goes far beyond the particulars of one quarter. Forget the question of by how many cents per share it missed earnings expectations, and ask yourself this: Why isn't CNET gushing cash? Its established brands in tech news and reviews should be printing money. No wonder hedge fund Jana Partners is trying to unseat its board. I'm not sure Jana has any plan, other than throwing the boardroom rascals out. So what's the problem, and what to do?
Microsoft's earnings in a nutshell: Sales of Vista were down quite a bit, while Office was slightly up. But Microsoft's also-ran online properties, the root of Steve Ballmer's Yahoo obsession, continued to flounder. Sales grew 40 percent, but its loss widened to $228 million. The more Microsoft spends on the Web, the more it loses. [WSJ]
Earnings season can bore, but behind some numbers, there's very human drama. Scripps, the home-and-garden media mini-empire, saw profits rise 22.8 percent to $84.1 million in the first quarter, thanks in large part to Scripps Interactive, led by former Yahoo executive Deanna Brown. Her unit swung to a profit of $21 million in the first quarter. A year ago, Scripps Interactive lost $15 million in the first quarter. At Yahoo, Brown, we had heard, choked under the rule of Yahoo media czar Scott Moore, whom some ex-employees called "suffocating." At the time, Brown only told us, "Sorry, not going to get into this." How politic. Numbers speak louder than words, at any rate.
Starbucks CEO Howard Schultz dampened analyst expectations for the company's performance ahead of its April 30 quarterly earnings anouncement, sending shares tumbling 10.4 percent in after-hours trading. "The current economic environment is the weakest in our company's history," he said to explain why the company is facing the first quarterly profit decline in eight years. The retailer has long traded on being a relatively affordable yuppie status symbol, serving up a dose of psychological salve for four dollars a cup to an American middle class in decline. But it looks like Schultz's stunt to bloster the elite cachet of a brand now as ubiquitously plebeian as your local McDonald's might not be enough to fuel continued growth. (Photo by Peter Kaminski)
Jeff Bezos can safely unclench his legs. Amazon.com reported first-quarter earnings of $143 million, up 29 percent from the same quarter last year, on sales of $4.14 billion, up 37 percent. Wall Street dithered over the forecast, sending shares down in after-hours trading, but the underlying reality is this: Amazon.com, already large, is growing at a prodigious rate at a time in its life when most expected it to slow down. And the growth had little to do with digital sales or Web services. No, people are simply buying more online, more often. CFO Tom Szkutak said the company saw no signs of a recession in U.S. shoppers' buying behavior. How can that be, as other companies complain of economic woes?
WebMD, an operator of health websites, cut the forecast it offered investors for 2008 sales to reflect a "a recent shift toward shorter term buying commitments in certain of its customers' consumer advertising purchases." What we want to know: Is this an ailment plaguing just WebMD, or something catching? A Madison Avenue source gives us her diagnosis.
Apple reported second-quarter revenues of $7.51 billion, up 43 percent from $5.26 billion in the same quarter last year. Analysts predicted $6.96 billion in revenue. Wall Street officially expected Apple to have sold 2 million Macs during the quarter. Whispers put the number around 2.3 million. So did reality. Apple profits climbed 36 percent during the quarter. So far, in Apple shares have remained flat in after-hours trading. Apple CFO Peter Oppenheimer gave analysts a forecast for third-quarter revenues of $7.2 billion, $30 million less than they expected.
Storage is a predictable need; have you ever heard anyone say they need less of it? That has long been EMC's pitch to Wall Street — that demand for its storage hardware and software is ever reliable. The earnings news from the company is mixed: Customers are still buying, with revenues up 17 percent to $3.5 billion, but buyers in the U.S. are taking longer to make up their minds and sign purchase orders. Rational caution, or a sign of trouble ahead? EMC CEO Joe Tucci, in a conference call, acknowledged that the environment was "tough," but stood by his earlier forecasts. If EMC's customers continue their delaying tactics, they may prove Tucci overconfident. At some point, his salespeople will bow on price to seal deals and make their quotas. Storage may be a necessity, but EMC's profit margins, which rose to 15.8 percent in the quarter, are not.
Yahoo beat analyst expectations for its first-quarter revenues by $30 million, $1.35 billion to $1.32 billion. Its net income, at $542 million, was considerably higher than Wall Street had hoped for, too. But $401 million of that profit came from a noncash gain, Yahoo's take from Alibaba.com's initial public offering, from which Yahoo profited because it owns 39 percent of Alibaba Group, Alibaba.com's parent company. Investors have taken this caveat into account, bidding Yahoo's stock slightly down in after-hours trading. Commenter WagCurious wants to tar and feather Yahoo CFO Blake Jorgensen for including these gains in Yahoo's quarterly revenues. But one-time gains like this are a well-understood phenomenon, and there's nothing unusual about Yahoo's treatment of it. If nothing else, Wall Street understands making money from buying and selling pieces of companies.
A tipster writes to confirm our hunch that Yahoo is putting the squeeze on expenses:
What's Yahoo CFO Blake Jorgensen so happy about? Try Yahoo's first quarter earnings on for size. Widely expected to surpass Wall Street expectations, Yahoo did not disappoint, reporting $1.35 billion in first quarter revenues after traffic acquisition costs, a 14 percent percent increase over the first quarter 2007. Still, Microsoft CEO Steve Ballmer said earlier today that positive earnings would not cause him to raise Microsoft's $31 per share offer for Yahoo. Yahoo CEO Jerry Yang, president Sue Decker and Jorgensen respond in our live coverage of Yahoo's analyst conference call, below.
As was widely predicted, Yahoo surpassed analysts' expectations in its first-quarter financials today. Yahoo reported $1.35 billion in first-quarter revenues after traffic acquisition costs, a 14 percent percent increase over the first quarter 2007. Analysts expected revenues around $1.32 billion for 11.9 percent year-over-year sales growth. Yahoo's full release, below. Follow our live coverage of Yahoo's analyst call, starting at 2 p.m.
