Tag: profits

Samsung profits slump

samsung-hqSamsung confirmed its first annual profit decline since 2011, but said that a fourth quarter pick up indicated that earnings may have stabilised.

The smartphone maker lost market share for three consecutive quarters up to July-September, and analysts say the trend likely continued in the October-December period.

The Tame Apple press claims it is because Samsung cannot beat the super bendy iPhone 6, but it is more likely that Samsung has seen its Chinese market disappear to locally made brands. It has also suffered from a weak won, which explains its limp.

Healthy memory chip demand and improvements in the mobile business on the back of new mid-to-low tier smartphones are buoying hopes that Samsung has at last staunched the bleeding.

Samsung said its fourth-quarter operating profit is likely to be $4.74 billion, beating what the cocaine nose jobs of Wall Street had predicted.

The outlook means Samsung’s 2014 profit will probably be the weakest in three years, although it marks a rebound from the third-quarter’s profit which was the firm’s lowest quarterly result in more than three years. The company is expected to release its annual results later this month.

Most analysts expect profits to continue improving through at least the second quarter of 2015 with the outfit’s semiconductor division to do much better than the mobile business in October-December.

The company did not provide a breakdown of its earnings figures in Thursday’s outlook, but a person with direct knowledge of the matter said that components sales picked up across the board, with healthy demand for memory chips and higher liquid crystal display panel prices.

The mobile division’s contribution to Samsung’s profit has slipped from about 68 percent at its peak in 2013 to about 44 percent in the third quarter.


HP sees profits plummet

meg-whitmanThe maker of expensive printer ink, HP, has surprised the cocaine nose jobs of Wall Street by telling them that its quarterly revenue fell in almost every business segment over the year.

The numbers highlight weaknesses in the company ahead of the company’s planned 2015 separation of its enterprise services from its traditional computer and printing units.

Sales fell 2.5 percent in the fourth quarter to $28.41 billion, from $29.13 billion a year earlier, HP said. Analysts had expected $28.76 billion. Profit declined 2.7 percent to $2.01 billion.

Chief Executive Meg Whitman cryptically told analysts that she said that “turnarounds were not linear” which will be news to any driver who uses a roundabout or attempts a three point turn.  She insists that after three years of her rule, HP is exactly where she thought it would be.

The enterprise group and enterprise services, areas that Whitman had previously flagged as growth drivers, showed revenue declines of four percent and seven percent.

On the call, Whitman said she expected a slower decline in enterprise revenue next year. Enterprise services would be the biggest “swing factor” in the company’s 2015 growth projections, she said.

The company’s personal computer division grew by four percent after a 12 percent jump in the prior quarter. Much of the growth in PCs was driven by a Microsoft decision to quit supporting older software, and Whitman said that was pretty much over now.

The high-margin printer business shrank by five percent.

Whitman is pinning her hopes on splitting the company into two next year, separating its computer and printer businesses from its faster-growing corporate hardware and services operations, and eliminating another 5,000 jobs as part of its turnaround plan.

“This separation was totally the right thing to do for this company,” Whitman said. “It is remarkable how it focuses the mind on overhead.” Well if turnarounds are not linear then you have to keep an eye on what is above you otherwise a turnaround might fall on you.

Halfords reports crash

halfsHalfords has seen a steep drive down in profits.

The company, which is mainly known for its bike and car part offerings, as well as staff who aren’t at all driven in helping their customers, reported a drop of 25 percent to £71 million in pretax profits for the 12 months to March 2013.

Despite it seeing a small profit in the group revenues, which were up by one percent, and a surge in cycling sales following the success of London 2012 and Sir Bradley Wiggins’ victory in the Tour de France, the company admitted it had seen a “demanding” trading environment.

It also admitted that its car repair arm, Autocentres, which in my opinion is regarded with as much trust as an Only Fools and Horses product, had seen a decline in profit.

However, this didn’t put the company off with it announcing it had opened 23 new Autocentres as investment for long-term growth continues

It has also tried to rectify its losses and appease shareholders,  with chief exec Matt Davies announcing an investment plan – codenamed the very original Getting Into Gear 2016 – which will aim to reposition the retail arm of the company and focus on sales growth to support “ongoing sustainable profitability”.

The company has also pledged to improve customer service as well as refit its shops.

Sharp announces new head honcho

sharplogoSharp has announced that it has made Kozo Takahashi its new president and CEO.

The Japanese company, which last week reported a loss of $5.4 billion, has said that the current executive vice president will take the president and CEO title from 25 June.

The announcement as part of a business reorganisation aimed at helping the company return to a profit in March 2014.

The company also needs to make repayments for a new loan in September.

Last week it was reported that the company was planning to axe 5,000 of its 51,000 workers over the next three years in China and Malaysia as well as halving the number of workers at its head offices and cutting its board members by half.

Samsung boosted by smartphone sales

Samsung HQ in CaliforniaGrowing sales of its smartphones have helped Samsung reach a record quarterly profit.

The company announced that it had raked in a net profit of $6.4 billion in the first quarter of 2013, 42 percent higher than the same time last year.

Samsung said its IM Division rang up the first quarter with a  seven percent increase from the previous quarter. It added that this was driven by “sound sales” of its GALAXY S III and GALAXY Note II devices, which aided profit margins for Mobile Communications.

However it warned that it expected global demand for smartphones in the second quarter would “dampen” as a result of  “heightened competition”.

It also admitted that the January-to-March quarter proved trying on the PC business, while the Networks Business came around with a stable supply of Long Term Evolution (LTE), fourth-generation equipment.

Demand for consumer electronics products in emerging markets stemmed further sales losses but weak seasonality and a sluggish economy took their toll on Samsung’s sales of TVs and home appliances. However, Samsung’s VP and Head of Investor Relations moved to drum up support claiming the company expected to increase R&D spending for strengthening its “competitiveness ahead of planned new product launches.”

He did, however manage expectations, warning that  the company couls experience stiffer competition in the mobile business due to expansion of the mid- to low-end smartphone market while TV growth would continue to wane in developed markets.

On the components side, global supply of PC DRAM remained weak, brought on by adjustments in the product mix by chip makers opting to manufacture mobile and server DRAM over chips used in PCs. Samsung is looking to improve its profit margins with a differentiated product portfolio.

The Display Panel segment faced a challenging quarter due to seasonally soft demand from set makers. However the introduction of new devices and increased shipments of smartphone display panels, prevented steeper losses.

Ingram Micro boasts successful quarter

IIMngram Micro saw a relatively successful first quarter of 2013.
The distie reported global sales of $10.26 billion, up 19 percent compared with $8.64 billion in the first quarter last year.

The company said its 2012 fourth quarter acquisitions of Brightpoint and Aptec added $1.1 billion and $75 million, respectively, to its first quarter revenue, contributing 13 percent to the growth.

Worldwide gross profit was $585.3 million – working out to 5.70 percent of total sales, compared to a worldwide gross profit of $467.6 million -5.41 percent of total sales- in the same quarter of last year.

However, the company admitted it fared badly when it came to its GAAP operating income which stood at $90.8 million and was negatively impacted by lower gross margin in the technology distribution business and continued investments in key strategic areas across all regions to further diversify revenues.

The figure compared with 2012 first quarter GAAP operating income of $104.1 million.

2013 first quarter GAAP net income was $49.8 million, compared with 2012 first quarter GAAP net income of $90 million, driven by favourable pricing on hard disk drives.

Google rakes in the cash for first quarter

google-ICGoogle made more than a few dollars in its latest quarter, raking in a cool $14 billion in revenue.

The company, which described the figures as a “strong start to 2013,” reported consolidated revenues of $13.97 billion for the quarter ended March 31, 2013, an increase of 31 percent compared to the first quarter of 2012.

GAAP operating income in the first quarter of 2013 was $3.48 billion, accounting for 25 percent of revenues. This was in comparison to $3.39 billion, or 32 percent of revenues, in the first quarter of 2012.

Non-GAAP operating income in the first quarter of 2013 was $4.22 billion, or 30 percent of revenues. This compared to non-GAAP operating income of $3.94 billion, or 37 percent of revenues, in the first quarter of 2012.

GAAP net income including net income from discontinued operations in the first quarter of 2013 was $3.35 billion, compared to $2.89 billion in the first quarter of 2012.

Non-GAAP net income in the first quarter of 2013 was $3.90 billion, compared to $3.33 billion in the first quarter of 2012.

Again it was Google’s ad business that generated the most profit with revenues hitting
$12.95 billion, or 93 percent of consolidated revenues, in the first quarter of 2013, representing a 22 percent increase over first quarter 2012 revenues of $10.65 billion.

Google-owned sites generated revenues of $8.64 billion, or 67 percent of total Google revenues, in the first quarter of 2013 – an 18 percent increase over the same period last year.

And its partner sites also raked in the cash generating revenues of $3.26 billion, or 25 percent of total Google revenues, in the first quarter of 2013. .

In the UK, Google revenues amounted to $1.39 billion, representing 11 percent of revenues.

Traffic acquisition costs, the portion of revenues shared with Google’s partners, increased to $2.96 billion in the first quarter of 2013, compared to $2.51 billion in the first quarter of 2012.

However the company lost out on some dough over in its flagging Motorola mobile sector with a decline of 27 percent in the first quarter of 2013.

IBM goes on axe rampage in France

ibm-officeIBM is said to be wielding the axe amongst its employees in France.

According to Reuters, the company, which reported a five percent decline in revenue to $23.4 billion for the first quarter of 2013, has said it will be trying to make up gaps through  $1 billion of accounting charges this year.

It also wants to ensure its profits are boosted by 2015, despite the critical global economic crisis.

Part of this saving will have a knock on effect on its workforce, with three trade union reps over in France claiming that the company plans to axe  up to 1,400 jobs in the country over the next two years.

IBM has yet to confirm that its heads in the US have okayed the pink slip practice, but the union reps have said the deed had already been communicated.

Pierry Poquet, secretary general of the UNSA union told Reuters that IBM head honchos were set to present the plan to cut between 1,200 and 1,400 staff in a meeting was planned for April 25.

The CFE-CGC union’s representative, Evelyne Heurtaux, backed up her pal saying she had also been told that there was a around 1,300 jobs slated for the next two years.

Tesco profits flag

tescoTesco is facing the same fate as many other businesses, reporting the first annual profit loss in nearly 20 years.

The supermarket giant said pre-tax profits were down 51 percent to £1.96 billion, while post-tax profits including the cost of its £1.2 billion US exit were £120 million, marking a decrease of 95.7 percent.

The company confirmed that it would be backing out of the US after its investment in 190 Fresh and Easy stores failed to make it a profit.

In Blighty the company has also announced a property write down of £804 million. This was as a result of a review by the company, which uncovered more than 100 sites, scooped up five years ago for potential stores, now lying dormant.

In a blog post, head honcho Philip Clarke said: “Much of this property was bought more than five years ago, some more than 10 years ago.

“That is before the 2008 financial crisis, before the iPhone, social media, tablet computers, before we knew how profoundly technology would change both how we and our customers live and shop.

“Technology has changed much that we all took for granted and it is still changing. The last five years have shown that change in retail can be disruptive and come in sharp steps, not a steady trend. We must anticipate change and act decisively so we looked hard at the land we own and conclude that although we have a strong and attractive network of stores, we will never develop some of this land, mostly the very large mixed-use developments.”

The past three months have also not been favourable to the company, with Tesco claiming its sales, not including petrol, only rose by 0.5 percent. This was a decrease from the growth the company faced in six weeks to 5 January when the company marked a 1.8 percent rise as a result of Christmas shopping.

WH Smith posts profits rise

smithsWH Smith has announced a profit for the last half year trading period.

The newsagent said it had seen a five percent rise in its figures, giving it a pre-tax profit of £69 million, with its successful “travel shops” helping it out and offsetting the falling sales it had experienced on the highstreet.

Its stores in airports, railway stations and motorway service areas saw a rise of seven percent, for the year ending in February, which outperformed the company’s traditional highstreet stores that rose by two percent.

The company also said various cost cutting measures shaving £9 million off its costs and outlining a further £8 million reductions in the future.

However it said that the trading environment would “remain challenging”.

The company currently has 621 high street stores in the UK and has also announced a move into China with plans to open 30 kiosks in the country.

Marks and Spencer sees decline in fashion

marksandspencerExpensive celebrity fueled adverts have lost their magic with Marks and Spencer reporting a fall in clothing sales.

The company has struggled with its clothing sales over the past few year.

However, it enjoyed a brief success after a range of initiatives. This included
hiring celebrities such as Myleene Klass, Dannii Minogue, Lulu and Gary Barlow to promote the brand, as well as targeting younger consumers.

Despite its latest figures rising slightly in the first three months of 2013, the company pointed out that the profit was gained through its food business, which offset a fall in clothing sales.

UK food sales hit a four percent growth compared to the same time last year, however clothing and merchandising was down by 3.8 percent.

M&S chief executive Mark Bolland said the company was “working hard” to improve its performance on general merchandise, blaming “difficult trading conditions.”

The company said its food division had been outstanding, with Easter food sales their best ever. The figures matched recent research by the British Retail Consortium, which in its latest highstreet tracker said Easter sales had helped revenue rise.

And it isn’t isolated in failing to make a profit on clothing with the highstreet in general suffering as a result of prolonged bad weather and the economic climate.

According to Clive Longbottom an analyst at Quocirca, there are a few things the chain could do to improve its flagging fashion figures.

“I think that M&S has started to slide back to the things it was doing wrong before,” he said. “It has a massive range of clothes, far too many for the sort of clientele it has”.

“Therefore, it has to carry a lot of inventory, and I expect that a lot of this has to be disposed of through sales or through cutting the labels out and selling off to others at cost or below,” Longbottom said.

He gave an example of a personal trip to a store , which he said was “laid out badly”.

“We were there to find a dress for my mother-in-law, a woman in her late 80s.  If she had been with us, I doubt that M&S would have made a sale at all, the clothing was laid out in completely different areas with no commonality or means of identifying where we should go,” he said.

“Better structure to how M&S lays out its goods may well help in ensuring that its mainstay audience can shop by category, rather than having different “makes” of clothing bunched together when all of them are M&S anyway.”

However, he praised the company’s underwear department, which he said kept everything in in one place and it is easy to compare and contrast and said Marks and Spencer should extend this to other parts of its store.

“Try to compare and contrast a skirt and blouse – you’ll need to pick things up and carry them around the whole store so that the three that you want to compare and contrast are in the same place at the same time – and then you have to dump the two that you don’t want, as it will be impossible to remember where they came from in the first place – so causing cost for staff to put things back where they came from,” he said.

“I’d advise cutting back on the number of styles M&S stocks; grouping by type of clothing, like skirts, dresses, blouses, etc, and having more staff on the floor to provide sales help to shoppers. On the whole, the M&S people we saw were generally behind the sales desks.”

Tesco leaves horse and gobbles up Giraffe

GiraffeTesco is still seemingly trying to use every trick in the profit book to boost its customer base and raise its profits.

The supermarket giant, which earlier this week announced it had launched a price promise voucher scheme, is rumoured to be sticking its neck out and gobbling up eatery Giraffe for £50 million.

It is thought that the deal could see the kid’s eatery being opened up within the supermarket’s stores, letting  it target a different type of customer and attract more footfall into its stores and helping it combat the profit warning it announced last year.

The move is just one of many which the supermarket hopes will improve its figures. Over the past months its restructured its stores to make them seem less clinical, while its also tried to make more of a presence in the tech space.

Last month it announced it was introducing a  Netflix rival – a free TV streaming service called Clubcard TV.

The beta trial is only available to Tesco staff for the time being, but when it officially launches it will be available to card-carrying Clubcard members.

Computacenter says “stumble in Germany” resulted in profit loss

poundsComputacenter has reported a four percent profit loss for the full year claiming it “stumbled in Germany”.

The British company said its profits stood at £71.3 million in 2012, compared to £74.2 million in 2011.

It blamed the loss on higher costs from new contracts, which bled into margins in the services business in Germany, its second-largest market by revenue.

And 2013 doesn’t look to be an easy road with the company claiming that this year would be dependant on the speed of recovery from the “problem contracts” in Germany, which it said was unpredictable.

However, it wasn’t all doom and gloom with the company reporting group revenues jumping 2.2 percent to £2.91 billion  compared to 2011’s  £2.85 billion.

Mike Norris, Chief Executive of the company said: “We expect 2013 to be a year of progress for Computacenter. While the Group financial outcome for 2013 will be dependent on the in-year performance of Germany and the speed at which we recover from our problem contracts, which is unpredictable, we are confident that these contracts will improve.

“More importantly, winning, contracting and taking on new contracts successfully, is more fundamental to the long-term growth of the business and its strategic development. This will be underpinned by our new Group operating model, which has taken effect in the UK and Germany, since the start of 2013.”

Primark and Domino’s do well

domsIt seems the current economic climate hasn’t got in the way of fast food fans, with Domino’s Pizza announcing that our appetite for the “treat” will help it generate 1,500 jobs this year.

The news comes after the cheesy chain, which promises to deliver within 30 mins, announced that it had sold 61 million pizzas last year, resulting in its 2012 annual profits rising by 11 percent to £46.7 million.

However, it admitted that on average its serving area was small, estimating that on average 19 percent of households were customers.

As a result the company has baked a plan to create more franchise-run stores as part of a drive for around 1,200 outlets, which it hopes will expand its customer waistlines, reach.

More than half of sales were made online, with 56 percent accounting for internet orders  compared to 44 percent a year earlier.

The chain said the rise was as a result of a range of factors. This included store openings, online demand, new stuffed-crust products and a busy summer of sporting events.

Its UK franchisees opened 57 new shops – taking the total to 727.

However 2013 had seen a flat start as a result of the snowy weather which  forced 498 UK stores to close at some point during the first seven weeks of the year.

And it’s not just Domino’s which is raking in the cash, with Associated British Foods claiming it will see a rise in its profits this year as a result of its clothing arm Primark riding high on the highstreet waves.

The company said sales at the cheap clothing chain had risen by 25 percent in the last six months and by seven percent from shops which had been open at least a year.

Over this period the company had opened 15 new stores, including a second store on London’s Oxford Street.

BAE sharpens Axe for 3,500 US staff

axeThe pink slips could once again be rearing their ugly heads.

This time staff at BAE Systems’ US ship maintenance business are reportedly facing job cuts as a result of the government’s military spending cuts.

The British arms producer could reportedly be making 3,500 – around 70 percent – staff redundant as a result of the US’ navy putting a halt on maintenance work on 13 ships. However, according to Bloomberg the cuts could also have a domino affect on on the company’s suppliers.

It has not been a good week for BAE.

Yesterday the company, which employs around 93,500 across the world, announced that it had made a loss in 2012.

Underlying profit fell six percent to £1.89 billion in the year, while pre-tax profits has dropped to £1.4 billion from £1.5 billion.

It was also bad news for sales, which fell seven percent to £17.8 billion from £19.2 billion in 2012, which the company said was a contributing factor in the failure to a merge with European defence firm and Airbus owner EADS.

The company said the losses were as a result of US defence cuts, as well as reduced military activity in Iraq and Afghanistan.