Sony Ericsson sees net profits fall 97%, looks to cut 2,000 jobs

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The royalty, lawsuit, and chipset machine better known as Qualcomm has gone public with its digits for the second quarter of fiscal 2008, and to sum things up, it's all looking pretty rosy. At $2.61 billion, revenue was up a solid 17 percent year over year -- up 7 from the previous quarter -- and income totaled $766 million, up 6 percent year over year. That works out to 47 cents worth of diluted earnings per share, a 9 percent improvement over the same period a year ago. The MediaFLO division still isn't in the black, though, with its Qualcomm Strategic Initiatives parent reporting a loss of 2 cents per share and $76 million worth of operating expenses in the quarter, "primarily related" to the mobile TV unit. Guess there's probably a little pressure for the AT&T launch to go smoothly, swiftly, and profitably, eh? [Warning: PDF link]
Economic downturn and Sprint woes be damned, because AT&T's not hearin' a bit of it. The company's wireless unit -- which also happens to be the largest carrier in the country -- announced that it put up some serious numbers in the first quarter of 2008, growing revenue 18.3 percent year over year for a grand total of $11.8 billion. It tacked on 1.3 million new subscribers in the quarter, an 8.7 percent improvement in net gain over the same period in 2007, and grew ARPU by 2 percent in that time. Perhaps most eye-widening, though, is the fact that wireless data revenue grew a boggling 57.3 percent over the last year, thanks in part to the 620 million and 44 billion multimedia and text messages sent in the three-month span, respectively. Needless to say, the wireless division's looking just a little more... shall we say, "dynamic" than the wireline group at the moment, as recent job moves would indicate.
Global economic meltdown be damned! RIM's humming right along, apparently, reporting a killer fourth quarter with $412.5 million in profit, beating its own estimates and netting more than double the amount from the same period a year prior. Jim Balsillie himself chimed in on the results, saying that the company "did not see any evidence of slowdown in our enterprise business" -- amazing, considering that a stagnating job market would seem to lead to smaller BlackBerry budgets. Perhaps even more impressive, though, is that RIM is predicting first quarter earnings that'll significantly outpace analyst estimates in the face of stiff competition that's getting ever stiffer in RIM's own enterprise turf and an economy that's showing no sign of turning around any time soon. Don't suppose they could divert some of those fat profits to shoring up shaky servers, hmm?
Nokia isn't the only manufacturer going the opposite direction of Motorola at the moment. LG managed to ship 23.7 million phones in the fourth quarter of 2007, a 40 percent improvement over the same period in 2006; following a trends across the industry, though, its revenue was up considerably less -- a mere 12 percent -- thanks to freefalling handset prices worldwide. The company says that a healthy portion of its success can be attributed to the good fortunes it has seen with Verizon's Venus and Voyager and with the Viewty throughout Europe. Things are looking good for 2008, too -- LG predicts that it'll ship a whopping 100 million handsets throughout the year, which if true would represent a 25 percent increase over 2007's numbers. As it stands, LG slides in with 7.1 percent of the global phone market share, slotting it fifth among the top five manufacturers (nothing new there) and about 2 percent behind number four, Sony Ericsson. Best of luck in the new year, dudes.
It ain't a magic bullet, but it looks like the RAZR 2 could end up being a big part of Motorola's turnaround after all -- a turnaround ironically necessary thanks to the company's over-reliance on the first gen RAZR. Though Motorola still ended up posting third quarter losses totaling $138 million in its mobile device division (compared to earnings of $843 million just one year prior), fourth quarter projections beat analysts' estimates, sending stock prices skyward in the process. A couple interesting bits from the report: the company's enterprise mobility group (think Q and the like) saw sales rise some 47 percent from a year ago, and remember that RAZR 2 we mentioned? Yeah, turns out Moto's nearing the magic one million mark already, with over 900,000 units having been sold. 'Course, it certainly doesn't hurt that all four national US carriers and several regionals have picked it up.
Although those Chad-based commercials may be unnerving, something is sure working for Alltel. Reportedly, the carrier added 205,000 subscriptions in the most recent quarter, which is "double the year-ago increase," and it also noted that the rate at which it lost customers fell to just 1.9-percent. Furthermore, the outfit raked in some $283 million in profits -- a fine sum compared to the $187 million garnered this time last year. As for the buyout, it suggested that it was expecting a "favorable FCC vote to come soon," meaning that the "takeover by TPG Capital and GS Capital Partners should be completed by the end of the year."
Research In Motion has little to kvetch about these days, especially when you consider that it essentially doubled its sales and profits from the same quarter a year ago. The BlackBerry maker recently announced that it had not only passed the ten-million subscriber mark, but "that its profit and revenue more than doubled in the period." Furthermore, the firm noted that "results should be better than expected for the rest of the year," and it suggested that the "outperformance was driven by the strong product cycle, as well as the diversification of its user base across multiple geographies and market segments."
Sprint's recent second quarter financial results showed an interesting mix of numbers: income dropped by 90 percent, wireless data revenue jumped by 40 percent and the carrier broke the 54 million-customer mark. Dropping from a $291 million profit in the year-ago quarter to a $19 million profit is, well, pretty huge. But, at least Sprint saw its average revenue per sub sit above $60 for its latest quarter, with $9.75 attributable to data revenue. Everyone break out some EV-DO data sessions in salute of this if you please. On a lighter note, Sprint CEO Gary Foresee said the iPhone "blip" has not significantly affected number ports to AT&T, although the level is up "slightly" from before the iPhone launch.
We'll admit, anyone paying even the slightest bit of attention should have seen this coming a mile away, but the latest financial news from Palm is far from peachy. The firm announced a whopping 43-percent dropoff in profits compared to this quarter just one year ago, and the stock subsequently slid four-percent as a result. Of course, the perpetual delays of its modern-day operating system cannot be helping the cause, and considering the innovation that has surfaced in the smartphone arena over the past 12 months, it was only a matter of time before this happened. Interestingly enough, rival RIM was able to find a way to keep on keepin' on all the while, as it simultaneously posted a staggering 76.5-percent increase in revenue from the same quarter a year ago -- talk about salting the wound.
Unlike video game consoles, phones are typically profitable to manufacture from day one and it turns out that the iPhone is no exception -- far from it, in fact. Teardown specialists at Portelligent claim that the 4GB iPhone runs Apple just $200 worth of components, while the 8GB adds an extra $20, not far off at all from iSuppli's slightly higher estimates from January. Granted those tallies don't include the actual cost of assembling the device -- but even so, those numbers are very far cries from the $500 and $600 asking prices at the register, leaving a healthy $299 and $379 respectively (of which an overwhelming majority are $379) for profit and miscellaneous costs. Interestingly, Portelligent's unceremonious destruction of an iPhone in the name of research revealed no further proof that Hon Hai / Foxconn is the ODM responsible for assembling the darned thing.





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