Tag Archives: Company Earnings

Apple turns healthy profit despite weak iPad sales

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Apple seems to be weathering the financial storm, albeit with a few hitches. The company reported a record high revenue of $90.1 billion in its fiscal fourth quarter, with a net profit of $20.7 billion. While those were only slight increases versus the same period last year (revenue was up 'just' 8 percent), they came despite a rough economic climate and near-flat revenue growth in the previous quarter.

The issues mainly stem from mixed performance across Apple's lineup. It won't surprise you to hear that the iPhone 14 debut helped fuel the company's mobile revenue ($42.6 billion versus last summer's $38.9 billion), but other segments were volatile. While the MacBook Air M2 helped Mac revenue jump 25 percent to $11.5 billion, iPad sales dropped sharply — they fell to just under $7.2 billion versus nearly $8.3 billion a year earlier. And while services like Apple Music and TV+ set a new record of $19.2 billion, that's only a mediocre bump versus the $18.3 billion from a year ago. Sales for the Apple Watch and smart home devices grew solidly from $8.8 billion to $9.7 billion.

The customer base appears to be strong, at least. During Apple's earnings call, CFO Luca Maestri noted that roughly half of Mac and iPad buyers were new to the platform. The company also touted an all-time (but unspecified) high for the number of active devices. CEO Tim Cook added that phone sales were strong despite tight supply constraints for the iPhone 14 Pro and Pro Max.

The fall (Apple's first fiscal quarter of 2023) could be rosier. Apple introduced new iPads in October this year where it released updated models in September last year, so we'd expect a bump in sales for the tablet lineup. Cook added that last year was "unusually strong" thanks to the iPad Pro M1 launch. The iPhone 14 family had also been available for just eight days during the fourth quarter, so overall iPhone sales should improve.

Apple isn't out of trouble yet. It's still hiring more cautiously, and supply issues (including for the Apple Watch Ultra, Cook says) may dog the company for a while. It's also unclear how people will take to devices like the iPhone 14 Plus, which didn't ship until this month. All the same, Apple may be happy. The computer market tanked 19.5 percent during the quarter, according to Gartner estimates, while Canalys believes smartphone shipments dropped 9 percent. If those figures are reasonably accurate, Apple is thriving simply by avoiding sharp declines in most categories.

Samsung posts a 23 percent profit decline due to weak demand

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Samsung has reported a record consolidated revenue of 76.78 trillion Korean won (US$54 billion) for the third quarter of 2022, but it has also posted a decline in profit from the previous quarter and year-over-year. The tech giant's operating profit (KRW 10.85 trillion or US$7.6 billion) has declined 23 percent from the second quarter and around 31.4 percent from the same period last year. Samsung's operating profit from July to September 2021 was KRW 15.82 trillion, which was 26 percent higher than the quarter prior to that. In its earnings report, the company said its various divisions have been grappling with weak demand in the midst of global economic instability. 

Weak demand for consumer products and customers' inventory adjustments caused its Memory business' earnings to shrink. Its LSI business' earnings fell due to weak demand for phones and TVs, as well, though revenue from SoCs grew due to an increased portion of 5G. Samsung's Visual Display Business was also affected by low demand and increased costs.

Samsung's Mobile eXperience (MX) business was its bright spot last quarter. Together with the company's Networks business, it posted KRW 32.21 trillion (US$22.6 billion) in consolidated revenue and KRW 3.24 trillion (US$2.27 billion) in operating profit, which are both higher than the previous quarter's. The company attributes the MX business' success to sales of the Galaxy Z Fold 4 and Z Flip 4, both of which showed stronger growth than their predecessors. Further, the Galaxy S22 series was able to maintain "solid sales momentum." 

The tech giant expects its mobile business to perform even better in the fourth quarter as demand for smartphones and wearables increases due to year-end seasonality. And since the smartphone and wearable markets are expected to grow as a whole next year, Samsung's mobile business might continue bringing in solid profits. Another division that did well in the third quarter is the tech giant's Foundry business, which delivered record earnings (KRW 23.02 trillion or US$16 billion in consolidated revenue and KRW 5.12 trillion or US$3.6 billion in operating profit) thanks to solid demand from global customers.

On the same day that it released its third quarter earnings, Samsung has also formally named Jay Y. Lee as its executive chairman. It's mostly a symbolic move, seeing as Lee is the company's de-facto leader anyway. But as Bloomberg notes, the title could help make things smoother for Lee as he closes deals with other companies around the world in an effort to expand Samsung's semiconductor and biotechnology businesses. Lee, who was sentenced to five years in prison in 2017 after being found guilty of bribing public officials, received a presidential pardon in August so he could help South Korea overcome the economic crisis. 

Samsung posts a 23 percent profit decline due to weak demand

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Samsung has reported a record consolidated revenue of 76.78 trillion Korean won (US$54 billion) for the third quarter of 2022, but it has also posted a decline in profit from the previous quarter and year-over-year. The tech giant's operating profit (KRW 10.85 trillion or US$7.6 billion) has declined 23 percent from the second quarter and around 31.4 percent from the same period last year. Samsung's operating profit from July to September 2021 was KRW 15.82 trillion, which was 26 percent higher than the quarter prior to that. In its earnings report, the company said its various divisions have been grappling with weak demand in the midst of global economic instability. 

Weak demand for consumer products and customers' inventory adjustments caused its Memory business' earnings to shrink. Its LSI business' earnings fell due to weak demand for phones and TVs, as well, though revenue from SoCs grew due to an increased portion of 5G. Samsung's Visual Display Business was also affected by low demand and increased costs.

Samsung's Mobile eXperience (MX) business was its bright spot last quarter. Together with the company's Networks business, it posted KRW 32.21 trillion (US$22.6 billion) in consolidated revenue and KRW 3.24 trillion (US$2.27 billion) in operating profit, which are both higher than the previous quarter's. The company attributes the MX business' success to sales of the Galaxy Z Fold 4 and Z Flip 4, both of which showed stronger growth than their predecessors. Further, the Galaxy S22 series was able to maintain "solid sales momentum." 

The tech giant expects its mobile business to perform even better in the fourth quarter as demand for smartphones and wearables increases due to year-end seasonality. And since the smartphone and wearable markets are expected to grow as a whole next year, Samsung's mobile business might continue bringing in solid profits. Another division that did well in the third quarter is the tech giant's Foundry business, which delivered record earnings (KRW 23.02 trillion or US$16 billion in consolidated revenue and KRW 5.12 trillion or US$3.6 billion in operating profit) thanks to solid demand from global customers.

On the same day that it released its third quarter earnings, Samsung has also formally named Jay Y. Lee as its executive chairman. It's mostly a symbolic move, seeing as Lee is the company's de-facto leader anyway. But as Bloomberg notes, the title could help make things smoother for Lee as he closes deals with other companies around the world in an effort to expand Samsung's semiconductor and biotechnology businesses. Lee, who was sentenced to five years in prison in 2017 after being found guilty of bribing public officials, received a presidential pardon in August so he could help South Korea overcome the economic crisis. 

Meta says it will lose even more money on the metaverse in 2023

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A year later, Meta’s pivot to the metaverse is proving even more expensive. Reality Labs is losing more money than ever, Facebook’s parent company disclosed in its latest earnings report.

Reality Labs, the unit that oversees the company’s virtual and augmented reality projects, lost $3.7 billion in the third-quarter of 2022, a jump from a $2.6 billion loss a year ago and $2.8 billion last quarter. Reality Labs has lost more than $9 billion so far in 2022. And the company’s finance chief said the trend is unlikely to reverse anytime soon. “We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year,” outgoing CFO Dave Whener said in a statement.

That’s significant because Meta’s massive investment in Reality labs has already proved costly for the company. Meta reported earlier this year that it lost $10 billion on Reality labs in 2021. The company also confirmed that the “next generation of our consumer Quest headset” is expected to launch “later next year,” an apparent reference to a Meta Quest 3.

But CEO Mark Zuckerberg said investing in “the next computing platform” remained a top priority. “This is a massive undertaking and it's often going to take a few versions of each product before they become mainstream,” he said. “But I think that our work here is going to be of historic importance and create the foundation for an entirely new way that we will interact with each other and blend technology into our lives.”

At the same time, he also warned that the company could face “near-term challenges on revenue.” The company reported $28 billion in revenue for the quarter, which was in line with analyst expectations, but “still behind where I think we should be,” according to Zuckerberg.

Zuckerberg also confirmed that Meta would continue to slash hiring as it deals with slowing revenue growth. “Some teams will grow meaningfully but most other teams will stay flat or shrink over the next year,” he said. “In aggregate, we expect to end 2023 as either roughly the same size or even a slightly smaller organization than we are today.”

On the other hand, Meta’s “family of apps” has continued to grow, and Zuckerberg reported new milestones for both Instagram and WhatsApp: Instagram has 2 billion monthly active users, while WhatsApp now has 2 billion daily active users. "There's been a bunch of speculation about engagement on our apps and what we're seeing is more positive,” he said.

Zuckerberg also talked about his desire to shift the company’s services to be more of a “discovery engine” where users’ feeds will be driven more by recommendations, which he said could help the company better compete with TikTok.

But he also said that Meta’s costly investments in the metaverse would eventually pay off, citing the company’s ongoing ad revenue issues in the face of changes from Apple. Investors have remained skeptical of Zuckerberg’s emphasis on the metaverse, with one large shareholder saying earlier this week the company has “lost the confidence of investors.”

That skepticism was also present during Meta’s third-quarter earnings call with analysts. “I think kind of summing up how investors are feeling right now is that there are just too many experimental bets versus proven bets … I think everyone wants to hear why you think this pays off,” one analyst asked.

“There's a difference between something being experimental and not knowing how good it's going to end up being,” Zuckerberg responded. “The metaverse work is a longer term set of efforts that we're working on. But, I don't know, I think that is going to end up working too.

Meta says it will lose even more money on the metaverse in 2023

Posted on by

A year later, Meta’s pivot to the metaverse is proving even more expensive. Reality Labs is losing more money than ever, Facebook’s parent company disclosed in its latest earnings report.

Reality Labs, the unit that oversees the company’s virtual and augmented reality projects, lost $3.7 billion in the third-quarter of 2022, a jump from a $2.6 billion loss a year ago and $2.8 billion last quarter. Reality Labs has lost more than $9 billion so far in 2022. And the company’s finance chief said the trend is unlikely to reverse anytime soon. “We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year,” outgoing CFO Dave Whener said in a statement.

That’s significant because Meta’s massive investment in Reality labs has already proved costly for the company. Meta reported earlier this year that it lost $10 billion on Reality labs in 2021. The company also confirmed that the “next generation of our consumer Quest headset” is expected to launch “later next year,” an apparent reference to a Meta Quest 3.

But CEO Mark Zuckerberg said investing in “the next computing platform” remained a top priority. “This is a massive undertaking and it's often going to take a few versions of each product before they become mainstream,” he said. “But I think that our work here is going to be of historic importance and create the foundation for an entirely new way that we will interact with each other and blend technology into our lives.”

At the same time, he also warned that the company could face “near-term challenges on revenue.” The company reported $28 billion in revenue for the quarter, which was in line with analyst expectations, but “still behind where I think we should be,” according to Zuckerberg.

Zuckerberg also confirmed that Meta would continue to slash hiring as it deals with slowing revenue growth. “Some teams will grow meaningfully but most other teams will stay flat or shrink over the next year,” he said. “In aggregate, we expect to end 2023 as either roughly the same size or even a slightly smaller organization than we are today.”

On the other hand, Meta’s “family of apps” has continued to grow, and Zuckerberg reported new milestones for both Instagram and WhatsApp: Instagram has 2 billion monthly active users, while WhatsApp now has 2 billion daily active users. "There's been a bunch of speculation about engagement on our apps and what we're seeing is more positive,” he said.

Zuckerberg also talked about his desire to shift the company’s services to be more of a “discovery engine” where users’ feeds will be driven more by recommendations, which he said could help the company better compete with TikTok.

But he also said that Meta’s costly investments in the metaverse would eventually pay off, citing the company’s ongoing ad revenue issues in the face of changes from Apple. Investors have remained skeptical of Zuckerberg’s emphasis on the metaverse, with one large shareholder saying earlier this week the company has “lost the confidence of investors.”

That skepticism was also present during Meta’s third-quarter earnings call with analysts. “I think kind of summing up how investors are feeling right now is that there are just too many experimental bets versus proven bets … I think everyone wants to hear why you think this pays off,” one analyst asked.

“There's a difference between something being experimental and not knowing how good it's going to end up being,” Zuckerberg responded. “The metaverse work is a longer term set of efforts that we're working on. But, I don't know, I think that is going to end up working too.

DJI unveils Avata, a cinewhoop-style FPV drone

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DJI has launched a new cinematic drone called Avata, which was made to work with the new DJI Goggles 2 video headset. While it's in the same category as the brand's previous first-person view (FPV) cinematic model, it takes on a more usual "cinewhoop" form factor with prop guards protecting its quad propellers. Since it's a cinewhoop, the Avata was designed to have the speed and agility of racers but with the stabilization technology needed to be able to capture smooth and vivid footage. 

It can hover, accelerate like a racer and zoom in and out of tight spaces while shooting videos, and its battery can last for up to 18 minutes before needing a recharge. The Avata is equipped with a stabilized camera that has a 1/1.7-inch CMOS sensor with 48 million effective pixels, an f/2.8 aperture and an ultra wide-angle lens. That camera is capable of shooting 4K videos in 60fps and 2.7K videos in 50, 60, 100 or 120 fps. And users can shoot quite a bit of footage before worrying about space, since it has 20GB of internal storage.

While it can be controlled using the existing DJI FPV Remote Controller 2 and the DJI FPV Goggles V2, it was designed to be used with the company's newer models. DJI Goggles 2 is the brand's next-gen video headset with a clearer micro-OLED screen than its predecessor and an adjustable diopter, so that people who wear glasses wouldn't need them while using the device. It can wirelessly stream the drone's live footage from the user's phone or computer for an immersive first-person viewing experience. Meanwhile, the DJI Motion Controller gives pilots the power to perform complex flight maneuvers with one hand. 

The DJI Avata is available starting today from the company's website and various retailers. On its own, the drone costs €579, £499 or $629, while a set with the DJI Goggles 2 and a DJI Motion Controller costs €1,429, £1,229 or $1,388.

DJI
DJI

DJI unveils Avata, a cinewhoop-style FPV drone

Posted on by

DJI has launched a new cinematic drone called Avata, which was made to work with the new DJI Goggles 2 video headset. While it's in the same category as the brand's previous first-person view (FPV) cinematic model, it takes on a more usual "cinewhoop" form factor with prop guards protecting its quad propellers. Since it's a cinewhoop, the Avata was designed to have the speed and agility of racers but with the stabilization technology needed to be able to capture smooth and vivid footage. 

It can hover, accelerate like a racer and zoom in and out of tight spaces while shooting videos, and its battery can last for up to 18 minutes before needing a recharge. The Avata is equipped with a stabilized camera that has a 1/1.7-inch CMOS sensor with 48 million effective pixels, an f/2.8 aperture and an ultra wide-angle lens. That camera is capable of shooting 4K videos in 60fps and 2.7K videos in 50, 60, 100 or 120 fps. And users can shoot quite a bit of footage before worrying about space, since it has 20GB of internal storage.

While it can be controlled using the existing DJI FPV Remote Controller 2 and the DJI FPV Goggles V2, it was designed to be used with the company's newer models. DJI Goggles 2 is the brand's next-gen video headset with a clearer micro-OLED screen than its predecessor and an adjustable diopter, so that people who wear glasses wouldn't need them while using the device. It can wirelessly stream the drone's live footage from the user's phone or computer for an immersive first-person viewing experience. Meanwhile, the DJI Motion Controller gives pilots the power to perform complex flight maneuvers with one hand. 

The DJI Avata is available starting today from the company's website and various retailers. On its own, the drone costs €579, £499 or $629, while a set with the DJI Goggles 2 and a DJI Motion Controller costs €1,429, £1,229 or $1,388.

DJI
DJI

Apple’s Mac and wearables revenue stumbles as tech sector recedes

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After a strong quarter earlier this year, Apple is continuing to break records. According to the company's financial results posted today, it's reporting a revenue record of $83 billion, an increase of 2 percent from the same period last year. Apple also said it reached an all-time high for its installed base of active devices "in every geographic segment and product category." However, the company's profits are down by a whole 11 percent, and while it continued to see growth in its iPhone sales, revenue from Macs and wearables dropped.

It's worth noting that Apple's recently announced MacBook Air with M2 chip only started shipping this month, so the numbers for Macs are likely to increase next quarter. Considering the devices the company is expected to launch in the fall, it's also possible consumers are holding out for new products and waiting out the ongoing inflation. 

Apple CEO Tim Cook said in a press release “This quarter’s record results speak to Apple’s constant efforts to innovate, to advance new possibilities, and to enrich the lives of our customers.” The company's CFO Luca Maestri added “Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment."

During the company's earnings call, Cook said that iPhone set a "June quarter record for both revenue and switchers to iPhone." Sales of iPhones indeed grew from $39.6 billion to $40.7 billion year over year. In response to a question about inflation affecting consumer demand, Cook said that while the macroeconomic environment had no obvious impact on iPhones, "Mac and iPad were so gated by supply that we didn't have enough product to test the demand." For the wearables, home and accessories categories, though, "we did some impact there that we would attribute to the macroeconomic environment," he said.

Cook also talked about how the company was able to welcome developers to Apple Park at WWDC this year, calling it "a reminder of the economic miracle the App Store represents." 

He added that "the iOS app economy supports more than 2.2 million jobs here in the United States and many more around the world." Apple prevented "nearly 1.5 billion dollars in fraudulent transactions," Cook said, and stopped "over 1.6 million risky and vulnerable apps and app updates." 

Maestri said Macs generated $7.4 billion in revenue "despite supply constraints." The iPad install base reached a new all-time high this quarter, with more than half of subscribers being new users in this time. Meanwhile, revenue from wearables was $8.1 billion, which is down 8 percent from the same period last year "as we faced foreign exchange headwinds, different launch timing for home and accessories products and supply constraints, as well as the overall macro economic environment," Maestri said. 

Still, the company hit a new all-time record of "installed base of devices in the category." Over two thirds of people who bought an Apple Watch during the quarter was new to the company, Maestri noted. Apple also saw strong performance in its paid subscription products, with more than 860 million paid subscriptions across the services it offers. 

Apple’s Mac and wearables revenue stumbles as tech sector recedes

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After a strong quarter earlier this year, Apple is continuing to break records. According to the company's financial results posted today, it's reporting a revenue record of $83 billion, an increase of 2 percent from the same period last year. Apple also said it reached an all-time high for its installed base of active devices "in every geographic segment and product category." However, the company's profits are down by a whole 11 percent, and while it continued to see growth in its iPhone sales, revenue from Macs and wearables dropped.

It's worth noting that Apple's recently announced MacBook Air with M2 chip only started shipping this month, so the numbers for Macs are likely to increase next quarter. Considering the devices the company is expected to launch in the fall, it's also possible consumers are holding out for new products and waiting out the ongoing inflation. 

Apple CEO Tim Cook said in a press release “This quarter’s record results speak to Apple’s constant efforts to innovate, to advance new possibilities, and to enrich the lives of our customers.” The company's CFO Luca Maestri added “Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment."

During the company's earnings call, Cook said that iPhone set a "June quarter record for both revenue and switchers to iPhone." Sales of iPhones indeed grew from $39.6 billion to $40.7 billion year over year. In response to a question about inflation affecting consumer demand, Cook said that while the macroeconomic environment had no obvious impact on iPhones, "Mac and iPad were so gated by supply that we didn't have enough product to test the demand." For the wearables, home and accessories categories, though, "we did some impact there that we would attribute to the macroeconomic environment," he said.

Cook also talked about how the company was able to welcome developers to Apple Park at WWDC this year, calling it "a reminder of the economic miracle the App Store represents." 

He added that "the iOS app economy supports more than 2.2 million jobs here in the United States and many more around the world." Apple prevented "nearly 1.5 billion dollars in fraudulent transactions," Cook said, and stopped "over 1.6 million risky and vulnerable apps and app updates." 

Maestri said Macs generated $7.4 billion in revenue "despite supply constraints." The iPad install base reached a new all-time high this quarter, with more than half of subscribers being new users in this time. Meanwhile, revenue from wearables was $8.1 billion, which is down 8 percent from the same period last year "as we faced foreign exchange headwinds, different launch timing for home and accessories products and supply constraints, as well as the overall macro economic environment," Maestri said. 

Still, the company hit a new all-time record of "installed base of devices in the category." Over two thirds of people who bought an Apple Watch during the quarter was new to the company, Maestri noted. Apple also saw strong performance in its paid subscription products, with more than 860 million paid subscriptions across the services it offers. 

Samsung posts 12 percent increase in profit but warns of weak mobile and PC demand

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For the second quarter of 2022, Samsung has reported a consolidated revenue of KRW 77.2 trillion (US$59.4 billion), which is a record high for the quarter ending on June 30th. Samsung's operating profit also reached KRW 14.1 trillion (US$10.8 billion) — that's 12 percent higher from the same period a year earlier and is its best yet since 2018. As has been the case these past years, the company's semiconductor or Device Solutions (DS) division greatly contributed to those numbers and has achieved a historical high in quarterly revenue for the second consecutive quarter.

The DS division posted KRW 28.5 trillion (US$21.9 billion) in consolidated revenue and KRW 9.98 trillion (US$7.7 billion) in operating profit in the second quarter, thanks mostly to server chip demand. However, chip demand for consumer products, such as mobile phones and PCs, was much weaker than expected "due to widening impacts of macro issues." In fact, Samsung said its DRAM and NAND shipments came in below guidance. The company also expects demand for consumer devices to stay weak and even believes that there's a possibility for this slump in demand to make its way to enterprise.

As you can guess based on that information, Samsung's Mobile eXperience (MX) business was also affected by the overall decline in market demand. The company blamed "geopolitical issues and concerns over inflation on top of continued weak seasonality" for the mobile division's decline in earnings. It also said the costs of components and logistics affected the business' profitability and caused it to slide lower than the previous quarter's.

The tech giant doesn't expect smartphone sales to blow up next quarter either: Demand for new phones will likely stay similar year-on-year or show only a single-digital growth, it predicts, because of prolonged geopolitical issues and economic uncertainties. That said, it's hoping that the launch of new foldables could pad its sales numbers in the coming months. Samsung will unveil its next-gen foldable phones at its upcoming Unpacked event on August 10th.