Recession? Tech slump? Losses? Apparently these are all things Western Digital is not familiar with, even if just about everyone else in the tech industry is. The hard drive maker today reported record quarterly revenue of $2.2 billion, and that's not the only record that was set.
Hard drive shipments also hit a record high totaling 44.1 million units for the quarter. All tallied, Western Digital pulled in net income of $288 million, or $1.25 per share, for its first fiscal quarter ended October 2, 2009.
"For the second consecutive quarter, demand for hard drives was stronger than expected as the positive industry conditions that materialized in the June quarter continued throughout the September quarter," said John Coyne, president and chief executive office. "We believe that demand is being driven primarily by consumers as a result of the growing social media phenomenon. This is creating demand in mobile and desktop PCs, branded products, and enterprise storage."
Western Digital went on to say that its hard drive inventories remain at historically low levels. And going forward, the hard drive maker says demand remains strong, so the good times should continue.
Microsoft today announced revenue of just $12.95 billion for the first quarter ended September 30, 2009, and while smaller companies would love to switch places with the software giant, the numbers represent a 14 percent decline for Microsoft from the same period one year ago.
Putting a positive spin on its first quarter results, Microsoft said the numbers reflect the deferral of $1.47 billion of revenue related to the Windows 7 Upgrade Option program and presales of the just-released OS to OEMs and retailers before it officially launched. If you were to add the deferred revenue back into the equation, the year-on-year decline would only be 4 percent, Microsoft noted.
"We are very pleased with our performance this quarter and particularly by the strong consumer demand for Windows," said Chris Liddell, chief financial officer at Microsoft. "We also maintained our cost discipline, which allowed us to drive strong earnings performance despite continued tough overall economic conditions."
Microsoft also noted that it is reducing its operating expense guidance to $26.2 billion to $26.5 billion for the full year ending June 30, 2010.
Liddell will discuss the results in more detail later today during a webcast, which will be available for replay until the end of the business day.
Yahoo was able to report positive numbers to the tune of $186m so far this year compared to the disappointing $54m they reported this time last year. While those numbers seem promising, sales fell about 12% this year with revenue down to $1.58b.
They can report these numbers because thye slashed more than 2,000 jobs during the past year, freeing some of their overhead costs. Further, they deployed some large service changes, such as welcoming the use of rivals onto its portal, and upgrading and enhancing its web search tools. They also initiated a $100m global advertising campaign for its portal and advertising services.
Most likely, Microsoft is happiest to hear this positive growth as they signed a deal in July to utilize Yahoo’s advertising sales in exchange for Microsoft’s search services. The Federal Trade Commission is still finalizing the deal.
IBM on Thursday posted its third quarter results, and for the most part, it was all good news for Big Blue. Compared to last year, the company posted better numbers pretty much across the board.
IBM report third quarter diluted earnings of $2.40 per share, up 18 percent over last year's earnings of $2.04 per share. Net income also shot up by double-digit percentage points and settled at $3.2 billion, up from $2.8 billion last year, which is a 14 percent gain.
"We continued to invest for growth in areas where clients see potential for value creation including Smarter Planet solutions, cloud computing, and advanced business analytics," the company said in a statement. "We are optimistic about 2009 as we again raise our full-expectations and we remain well had of pace for our 2010 roadmap of $10 to $11 per share."
By the end of the year, IBM said it now expects full-year earnings to hit $9.85 per share compared with its previous expectation of at least $9.70 per share.
Earlier this week Intel reported better than expected numbers and said it was confident about the future ahead, which seems to be the theme for the quarter. No. 2 chip maker AMD said today that it lost money in the third quarter -- $128 million to be exact , or 18 cents per share -- which is less than the $134 million the company lost one year ago.
AMD's revenue took a backward slide to the tune of 22 percent, settling in at $1.4 billion. The silver lining is that analysts had expected AMD's loss to be in the neighborhood of 30 percent, so by that token, AMD is actually doing pretty well when graded on a curve.
Like every other company in the tech industry, AMD took a hit to its bottom line because of weak computer sales in the first half of the year. However, the chip maker's shipments actually rose from the previous quarter, driven in large part by strong demand for mobile processors.
It's been 8 months since AMD finalized its manufacturing spinoff deal, but a weak economy and slumping tech sector have made it difficult to discern what effect the deal has had on AMD's numbers.
They worked on integrating their “social voting” mechanism into sponsored ad placement to provide sponsors and users with a better advertising experience. The users can digg specific ads allowing them to travel up the flow of diggs. Each ad’s cost-per-click is adjusted based upon its number of diggs—higher cost for lesser (buried) diggs. The idea is to encourage advertisers to create ads that are worthwhile to the user, if the ad gets buried, it gets expensive, urging the sponsor to pull the ad down.
Maser boasted that the new platform proved effective, “so far we’ve already tripled our revenue forecast from this initiative.” An Intel sponsored blog earned a 2.2 percent click-through-rate, others earning close to 3 percent, compared with the average regular display ad on Digg earning about .08 percent.
Have you noticed the ads? Have you clicked on any, or Dugg any? Considering the web will likely always have ad sponsorship, what do you think of the new model?
In a turbulent tech industry in an even shakier economy, Intel's bottom line remains remarkably steadfast. The No. 1 chip maker today reported net income of $1.9 billion on shares of $9.4 billion. That breaks down to 33 cents per share, besting Wall Street's projection of 28 cents on revenue of $9.06 billion.
"This momentum in the current economic climate, plus our product leadership, gives us confidence about our business prospects going forward," said Intel CEO Paul Otellini.
Otellini added that his company's success is the result of having "the right products at the right costs at the right times for a recovering global economy." He specifically pointed out strong notebook growth, an area Intel has performed particularly well. And it doesn't hurt that the chip maker has virtually no competition in the fast growing netbook and nettop sectors.
Looking ahead, Intel projects fourth quarter revenue to hit $10.1 billion, putting it on pace with last year's numbers. It would also once again best Wall Street's projection of $9.52 billion for Q4.
The explosion of mini-notes (netbooks) this past year has been a bitter-sweet pill for notebook manufacturers to swallow. On the one hand, PC makers will take revenue wherever they can get it, and the volume growth looks good to investors. But the profit margins aren't as attractive on low-cost netbooks as they are on pricier notebooks, and as netbook shipments grow, notebook revenue declines, according to a new report by DisplaySearch.
Netbook revenue surged 37 percent in in the third quarter, and a staggering 264 percent in year-on-year. But while consumers are gobbling up low powered, low price mini-notes, few buyers seem interested in larger notebooks anymore, a segment in which revenue was down in every quarter for the past year.
"Mini-notes have been a significant contributor to volume growth in the portable PC market as their very attractive price points make owning a secondary computer viable for many consumers. However, the lower ASPs of these devices are clearly having a negative impact on portable PC market revenue," said John F. Jacobs, Director of Notebook Market Research.
DisplaySearch said it expects this trend to continue well into next year, with mini-notes predicted to account for 21.5 percent of shipment volume but just 10.9 percent of total revenue for the portable PC market in 2010.
Taiwan based manufacturer of network solutions, D-Link, saw its highest revenues of the year last month. In August, the firm saw consolidated revenues of $80.43 million. This is particularly good news for D-Link, as the first eight months of the year showed a 16% decrease from 2008 numbers.
The monthly figures were also 7.8% higher than August of last year. D-Link also expects revenue to continue climbing for the rest of the year. Things are also looking up for 2010. "There's a lot of space for growth, especially in the emerging markets. Brazil and China appear to be climbing out of a slowdown, and that's going to drive some of our growth," said D-Link CEO, Tony Tsao.
The summer hasn't been particularly kind to Silicon Integrated Systems, who saw its revenues for August tumble 25.8 percent on year to $413.4 million. However, that figure also marks the eighth consecutive month of growth for the entry-level and IGP chipset maker.
SiS said it expects growth to continue to the tune of 20 percent for the third quarter, and they're probably right. The growth in August can mainly be attributed to rising sales of entry- and mid-level PC chipsets, as well as Xbox 360 southbridge chipsets, the company said. And with the Xbox 360 recently receiving an attractive price cut, SiS could potentially do very well in the console sector.
SiS currently supplies budget chipsets to Asus, ECS, and Clevo, among other less recognizable brands.